Commuting for workers with no fixed base – Working Time or Rest Time?

The recent Spanish case of Federación de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another (C-266/14) which was referred to the European Court of Justice (ECJ) raised the issue of whether peripatetic workers (workers with no fixed workplace) should have their time spent travelling to their first job of the day and also back home from their last job counted as working time for the purposes of the Working Time Directive (the Directive).

Facts of the Case

The facts of the case relate to two security system installation and maintenance companies who employed technicians across Spain who were all assigned to the central branch in Madrid but were based all across the country and responsible for their respective regions. Each technician was provided with a company vehicle to use for travel to and between jobs. The companies did not regard the time spent travelling from the employees home to the first assignment of the day or the time taken to get from the last job of the day back home as “working time”, rather deeming it as “rest” (the Directive gives no intermediate position so the time must fall into one of these categories). The employees argued that this was not the correct stance as they would sometimes have distances of up to 100km to travel and this should merit payment.

Advocate General’s Opinion 

As a result of this the Spanish Courts sought clarification from the ECJ as to whether this type of commuting constituted “working time”. In the Advocate General’s (AG) opinion it should. This is not a binding judgment and the official decision will likely not be made for a number of months but the AG’s guidance is often followed by the ECJ.

The AG reasoned what should be considered “working time” by reference to a tripartite test .

The three criteria are:

  • To be at the workplace
  • To be at the disposal of the employer
  • To be carrying out work activity or duties

The AG begins his explanation with the third of these criteria. The fact that these workers have no habitual place of work and instead are required to be at numerous different premises each day inherently means that travel is an integral part of them carrying out their work activities. From this it follows, the AG argues, that the first criterion is also met. If travel is such a key part of these workers activities then the workplace cannot be reduced to the employee’s presence in the premises of a customer and travel to and from the premises of these customers designated by the employer should be considered the “workplace”. The issue the Spanish Courts seem to have had trouble with is determining whether at the times discussed above the employee is at the disposal of the employer. This test poses the question of whether the worker is legally obliged to obey the instructions of their employer to carry out their activities for the benefit of that employer. Since the journeys and distances travelled depend exclusively on the employer’s wishes, the travelling, including the first and last journeys of the day, can be seen to be done in the context of the hierarchical employer-employee relationship. As such it is argued by the AG that it is not only at the job site that peripatetic workers are at the disposal of their employers and the third criterion for “working time” is met.

UK Impact

The Working Time Directive was implemented into UK law by the Working Time Regulations 1998. These regulations provide their own guidelines as to what constitutes “working” and commuting to and from work is normally not included but should the ECJ follow the advice of the Advocate General then this will be binding on UK courts.

Another thing that may be important to note, however, is the National Minimum Wage (NMW) Regulations. These do not derive from EU law so while the time spent travelling to and from work at the start and end of the day by peripatetic workers may be considered working time under the Directive, it may not be categorised as such under the NMW regulations. In fact in the draft 2015 regulations, reg 34(1) expressly provides that travel between the worker’s home and “a place where an assignment is carried out” will not constitute work time. As such affected workers may face a further fight to be paid at least the minimum wage for these hours.

If you need advice or have any questions please contact hjg@mitchells-roberton.co.uk or by phoning 0141-552-3422

http://www.mitchells-roberton.co.uk

Family Investment Company – A Good Idea

Perhaps something that may have slipped by most people in the Chancellor’s Summer Budget was the commitment to reduce Corporation Tax firstly from 20% to 19% by 2017 and then to 18% by 2020. The United Kingdom already enjoys one of the lowest Corporation Tax rates in the developed world comparing favourably with the United States (40%), Japan (33%) and Germany (29.65%).

It may not be immediately apparent how this impacts on estate planning so allow me to introduce the concept of a Family Investment Company (FIC). Since the Finance Act 2006 removed much of the favourable tax treatment for trusts there has been a comparative lack of alternatives to the more traditional trust structure.

In short a FIC is a private company whose shareholders are members of the same family. The shares can be structured to allow the ownership of the underlying assets to pass to the next generation without the older family members relinquishing control of the underlying assets before they are ready to do so.

If the initial subscription for shares is in cash there is no tax charge on setting up the FIC. If land or property is used it is likely there would be capital gains and stamp duty tax implications.

Perhaps this is best illustrated by example. The Jones family have considerable cash savings and create a FIC with Mr and Mrs Jones as directors and their four adult children as shareholders. They transfer £3.5 million in cash into the FIC with no tax implications.

As Mr and Mrs Jones wish to retain control over the company the children are not given voting rights meaning they are entitled to receive dividends and also to capital should the FIC be wound up.

Any profits the FIC makes are taxable at 20% which is significantly lower than the higher rate of income tax (40 or 45%) or the rate applicable to discretionary trusts (37.5 or 40%). Any UK dividend income received by the FIC will not be subject to tax but interest, rent and other income will be.

There is however the possibility of double taxation within the FIC structure where profits are first taxed at 20% and are then subject to income tax in the hands of the shareholders. It is still possible for shareholders to make tax efficient withdrawals in the form of dividends subject to their personal circumstances.

This is not to say that trusts no longer serve a purpose in estate planning. Where assets can be transferred into trust without incurring a charge to inheritance tax possibly through the use of business property relief or agricultural property relief it is likely that the more traditional trust structure will still prove to be more suitable. If the assets are cash a FIC is something that should be seriously considered as an alternative to a trust.

If the Treasury is committed to a scheme of graduated reductions in the rate of Corporation Tax it is likely that the FIC will become an ever more popular vehicle in estate planning in the years ahead.

If I can help or you would like more information please contact me Bruce Battersby by email on bruce@mitchells-roberton.co.uk

“It’s Not Fine”

For the past year Citizens Advice Scotland (CAS) has been leading a campaign against unfair charges for parking on private land.

Private parking fees are a hot topic in Scotland with CAS Head of Policy Susan McPhee saying “It is one of the most common consumer issues that we see.”  The number of people seeking advice from CAS  increased by 45% last year and in March 2015 alone approximately 25,000 people contacted CAS regarding parking charges of up to £200.

So a document published by CAS on 20th July 2015 confirming that private car parking charges can be challenged has been hailed as an “important milestone in the campaign for fairer parking charges.”

The legal position has always been unclear in Scotland so that is why the CAS commissioned a formal legal opinion from Mark Lindsay QC. Mr Lindsay has argued that motorists can challenge private fees if signs are badly displayed or the charge demanded is too steep. Motorists should be able to read the signs detailing the contract to park on private land before they park. As Mr Lindsay states “The notices require to be so prominent and clear that no reasonable person could claim to have been unaware of the terms and conditions incorporated into the contract by the notice.”  If the signage is unreadable before parking the contract is invalid and therefore the fine is unenforceable.

The QC also states that the fine can only be enforceable if it can be proven to be a “genuine pre-estimate of loss” incurred by the company. The parking company would have “to show that its likely actual losses sustained as a result of the motorist overstaying are broadly comparable with the parking charge”. Mr Lindsay believes the £100 or more demanded by some companies does not meet this threshold.

As Susan McPhee states people can now “challenge private parking fees on two specific grounds: the size of the charge and whether the charges were adequately displaced in the car park.”

“Legally consumers now have a clear guide to how they can get redress for unfair treatment and car parking firms know exactly what they are required to do in managing their businesses fairly and legally.”

If I can assist in any way please do not hesitate to contact me by email Angela@mitchells-roberton.co.uk or by phoning me on 0141 552 3422 and I will do my best to help.

Get on your bike!

Believe me when I tell you I have nothing in common with Norman Tebbit but, for entirely different and laudable reasons, I would coin his phrase and ask employees to “get on their bikes”. I am delighted to say that Mitchells Roberton has joined Cyclescheme, an initiative to encourage people to cycle to work. It is a super scheme. The health and environmental benefits are obvious but there are also significant financial incentives:

  • Reduced commuting costs
  • No parking costs – we are lucky that our offices at George House, North Hanover Street, Glasgow benefit from a secure and covered bike shed (and shower facilities!) – most places of work will have somewhere to park a bike at no cost.
  • Most significantly, employees typically save at least 30% on the cost of a new bike and accessories.

This is how it works:

  • The employer pays for a new bike & accessories (up to £1000) and retains ownership.
  • The employee hires the bike by a monthly salary sacrifice from their gross pay over an initial hire period (usually 12 months).
  • The employee then pays a nominal final amount (3%-7% of the initial cost of the bike) and after a secondary “hire” period (no further payments) ownership transfers to the employee.
  • The employee still earns the same amount. Deducting payments from gross salary rather than net salary is how the cost savings are achieved.

Most bike shops participate in the scheme and there are lots to choose from.

I joined the scheme recently and have been cycling to work since, so middle age and being dreadfully unfit are no barriers! My commute is about 4 miles and takes less than 20 minutes door to door. Glasgow’s roads are reasonably bike-friendly and there are extensive cycle lanes and paths to use. As I write my bike is in the courtyard waiting to be pedalled home.

Happy trails!

The Case of the Tumbling Lassie

An article in the Scottish Legal News of 29th June 2015 caught my eye. It refers to a case found by Alan McLean QC in a footnote of a law book, which case dates way back to 1647. It is about a child who had been “bought” from her mother and forced to work by a travelling showman. She performed as a gymnast , a stage attraction, known as  “the tumbling lassie”.

The girl had to dance “in all shapes” and “Physicians attested the employment of tumbling would kill her”. At that point the girl was taken in and cared for by a kindly couple.

The showman was furious and raised an action for damages against the couple saying that he had paid for the girl and she belonged to him.

The case is known as Reid v the Scots of Harden and there are handwritten notes on the case in the National Library of Scotland. The claim was dismissed by the judges at the Court of Session who reported “But we have no slaves in Scotland, and mothers cannot sell their bairns.”

Mr McLean was struck by this early upholding of human rights. He said “More than 325 years after Reid v Scot of Harden and his Lady, the “tumbling lassie” case, was decided in the Court of Session, it is astonishing, but true, that some people still live in Scotland as effective slaves, trafficked here on false pretences, threatened, trapped in menial work or worse, with their earnings withheld and their passports taken away. In other parts of the world, people languish in slavery because getting access to trained lawyers to uphold their rights- without which “the tumbling lassie” could not have been declared free-can be almost impossible.”

Arising from this Mr McLean and some of his colleagues have decided to raise funds to help fight modern-day slavery and have plans to organise a “Tumbling Lassie Ball.”

As Mr McLean concludes “ Lawyers , including judges, are among the “heroes of the piece…at the end of the day, people need lawyers to make their rights real.” I would agree.

E-Cigarettes In The Work Place

Action on Smoking and Health (ASH) in May 2015 estimated that 2.6 million adults in Great Britain currently use electronic cigarettes. Of these, approximately 1.1 million are ex-smokers while 1.5 million continue to use tobacco, alongside their electronic cigarette use. Yet electronic cigarettes are not subject to the ban on smoking in the work place introduced in Scotland in 2006, which only relates to lit substances.

E-cigarettes in the work place therefore pose a difficult question for UK employers. Should you treat them as if they are cigarettes or have different rules for their use?

I would advise all employers that it is crucial that they review their smoking policies for two important reasons.

Firstly employers must consider the health risks. E-cigarettes are indeed considered less harmful than conventional tobacco cigarettes and are used by some to help them quit smoking. However the health effects of e-cigarettes and passive “e-smoking” are not fully understood. There still remain question marks over the safety of second hand vapour which will certainly contain traces of nicotine and other toxic substances. Permitting e-smoking  in the work place may create the potential for future unwanted claims.

Secondly businesses must take note of a warning following the first employment tribunal case in the UK involving the use of e-cigarettes. The case focuses on a school catering assistant who was seen using an e-cigarette in full view of pupils. The headteacher reported the incident as smoking was not allowed on the premises. A disciplinary hearing was arranged but before it took place the catering assistant resigned claiming she had been constructively dismissed. The tribunal dismissed the claim but it indicated that if her employers had attempted to dismiss her on the grounds of gross misconduct, they would have faced the risk of a successful unfair dismissal claim as their smoking policy did not state that the use of e-cigarettes was prohibited.

It is clear that employers cannot rely on the legislation or their own policies that prohibit smoking to control the use of electronic cigarettes in the workplace and employers who decide that e-cigarettes should not be permitted must amend their non-smoking policies accordingly.

If I can help preparing an appropriate smoking policy for you or answer any questions please contact me by email Angela@mitchells-roberton.co.uk or by telephone 0141-552-3422.

Clare’s Law is to be extended across Scotland

A trial scheme which allows people to be told if their partner has been violent in the past is to be extended across Scotland.

The trial scheme has been running in Aberdeen and Ayrshire for the past six months. In this period 59 applications were made for information with 22 people being warned their partners had a history of domestic abuse. Following on from the success of the trial Nicola Sturgeon announced that the scheme would be rolled out throughout Scotland later this year.

The initiative is called ‘Clare’s Law’ after Clare Wood who was strangled and set on fire by George Appleton, her violent and obsessive former boyfriend, in Salford, Greater Manchester in 2009.    Appleton had a history of violence and harassment against women which Ms Wood did not know about. Her father, Michael Brown, has been campaigning for people to have the right to ask for information about partners. He said “I very much welcome the national roll out of the disclosure scheme across Scotland. It is heartening to see the success of the pilots and to know that the people given these disclosures will now hopefully not be victims of domestic abuse.”

Clare’s Law : How to use it.

Any person can make an application about their partner if they are concerned that that partner may harm them; and any concerned third party (such as a parent, relative, neighbour or friend) can also make an application.

So what do you do?

  1. The first step is quite simply to contact the police. You can do this online, in person at a police station, by phoning 101 or by even speaking to a police officer in the street.
  1. At this initial contact with the police you will need to provide details about yourself and what prompted your enquiry. If when speaking to the police you allege a crime by your partner – for example- that your partner punched you- the police will investigate this as a crime and may arrest your partner. The police will run initial checks to establish if there is an immediate risk.
  1. You will then have a face to face meeting to complete the application. At this stage you will need to provide 2 forms of identification. The police will run more checks and speak to other services such as the Social Work Department and Prison Services. Once the police have gathered all the information available they will do a risk assessment to determine if anyone is likely to be harmed. The maximum amount of time from this step until potential disclosure should be 45 days.
  1. If the police do not think abuse is likely they will not make a disclosure. The information the police and other agencies hold on individuals is private and there has to be a pressing reason to share it.
  1. If the police feel that abuse is likely a multi- agency meeting will be held to consider disclosure and whether any disclosure is ‘lawful, necessary and proportionate’ to protect you from your partner.  If at the meeting a decision is made to disclose information, it will then be decided who should receive the information and a safety plan will be put in place to provide you with help and support. The person to whom the disclosure is made is not allowed to disclose this information to anyone else without the explicit permission of the police.
  1. If you request a disclosure about your partner, it is likely that you would be given any details directly. If a third party has requested a disclosure the police may well go straight to the victim of abuse to make the disclosure. This means the third party might not be told the outcome.

If I can help or you would like further information then please contact me by email pdn@mitchells-roberton.co.uk or by phoning me on 0141-552-3422.