Continuing increases in rent and business rates, especially across London, will no doubt force many businesses to consider ways in which to reduce their office rental costs. By promoting hot desking and remote working businesses may be able to downsize their office space or even close down offices in some locations. However, following a recent judgment from the European Court of Justice (ECJ), businesses may find that such savings could come at a price.
In the case of Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another (c-266/14) (‘Tyco’) a company had closed down a number of regional offices and kept one central office in Madrid. As a result, its mobile workers were instructed to drive directly from their home address to their first assignment whereas they were previously required to turn up to an office first. In the past they were paid from the time they arrived at the office but following the office closures they were only paid once they reached the destination of their first assignment. In this case the ECJ decided that travelling to and from work could count as working time.
The ECJ’s decision in Tyco means that businesses must now take into account the additional time spent travelling to and from the first and last assignments when calculating its field employees’ weekly working hours. As a result businesses will have to reassess whether they are still compliant with the Working Time Regulations when it comes to maximum weekly working hours and rest periods. If the additional hours spent travelling would result in an average working week in excess of 48 hours then it will be necessary for businesses to either reduce the employees’ working time or include (and agree) opt out provisions in the employment contract. Additionally, businesses must pay close attention to whether the additional hours could dilute the salaries of employees to the extent that it falls below the national minimum wage.
The ECJ’s decision is likely to have less of an impact on businesses in the UK compared with other EU countries due to the widespread use of 48-hour opt out agreements in the UK. Nevertheless, businesses who are considering reducing or closing down office space to save on rental costs will now have to take into account the additional costs they may incur in terms of salaries for field workers travelling directly to and from their first and last assignments.