Many SME owners have been shocked to find they may be facing unexpected costs for employing mobile workers, both in terms of a pay hike and the need to employ additional staff.
It is all thanks to a ruling by the European Court of Justice (ECJ) in the case of Spanish security system installation company, Tyco Integrated Security SL.
In this case, the ECJ found that mobile workers that do not have a fixed or habitual place of work will now have the time they spend travelling between their homes and the premises of their first and last customers classed as “working time”.
Tyco tried to argue that this driving time was not “working time” but a “rest period”, as their workers weren’t carrying out the role required of them during that time. However, the ECJ said this was not the case because the workers are “at the employer’s disposal” during these times and cannot use those periods as personal leisure time.
What’s more, the court found Tyco’s argument that these journeys were not “working time” would risk the health and safety of its workers. This is because they were clearly giving more time to their working days than those hours dedicated to installing and maintaining the firm’s security systems.
Which SMEs are affected by this ECJ ruling?
In the main, this ruling will affect firms that employ staff such as sales representatives, care workers and maintenance staff. However, there are many SMEs who provide these services that are now having to count the cost.
That is because as these driving hours are now classed as “working time”, they will have to be factored into the 48 hour maximum working week currently set down by the Working Time Directive. If workers refuse to opt out and work more than 48 hours, their employers may have to take on more staff to cover the demand for their services.
What’s more, if the employer pays these staff on an hourly rate, he will have to pay them for the hours spent driving between home and their first and last appointments.
Jon Curtis, Partner at employment law firm Ironmonger Curtis says: “This is one of those cases that will hit certain specific businesses hard. Any business that has a remote workforce of hourly paid staff who travel a lot will find costs increase significantly. Not only pay but also holiday accrual will be affected. In some cases, I suspect companies will restructure as a result and open low cost regional bases.”