CA-2024-001613 - [2025] EWCA Civ 956

There are four issues.

The procedural issue

It is reasonably clear that one of HMRC’s arguments at the ET hearing, if it failed in its argument under regulation 30 that the travel in this case was time work, was that the Respondents’ business was arranged in a way which meant the words of regulation 34 either did not apply to the facts, or, if it did, the ET should look at the supposed reality of the situation. That argument, and Miss Hughes’s related argument on this appeal, were based on statements by Lord Leggatt in Uber (at paragraphs 68-78). Those statements were made in the same statutory context, but related to a different issue. That issue was what role a contract drafted by a sophisticated employer (who understood the legal issues) should play in the court’s decision about whether the other party to that contract was, for statutory purposes, a worker, or not.

HMRC urged the ET to hold that regulation 34 could not be intended to apply to a case like this, because, by the simple expedient of picking up workers from their homes, rather than requiring them first to attend the Respondents’ premises, the Respondents could avoid liability for paying the NMW for the long hours the worker spent travelling from their homes to their assignments. The ET rejected that argument, with great force and lucidity (see paragraphs 87-88, below). HMRC did not cross-appeal to the EAT against that conclusion. It might therefore be doubted whether this court should allow HMRC to revive that or a similar argument on this appeal, whether or not permission has been granted to run it. I will not spend time on the procedural niceties. The argument was considered by the ET, so no further findings of fact are necessary. As the ET did, I consider that the answer to this argument is clear, and that this court should deal with it. I will therefore do so. I add only that it is no surprise that the EAT did not deal with this argument, and that, obviously, the EAT cannot be criticised for that omission.

The issue of construction

The legislative context

There are four starting points for construing the Regulations. First, the Regulations deal the detailed implementation of social policy, in an area in which a statutory body has particular expertise and statutory functions. The LPC and the Secretary of State know more about the relevant policy and how best to implement it in practice than this court does. Second, the mechanisms in sections 5-8 of the Act mean that the Regulations are unusually sensitive, and potentially responsive to, social and legal developments. In short, those mechanisms ensure that if the LPC is concerned, for example, that the unusual facts of an appeal have brought to light a potential anomaly or loophole in the Regulations, it can bring that to the attention of the Secretary of State, and the Secretary of State can then decide whether there is a loophole, and if so, whether, and if so, how that loophole should be closed. The LPC and the Secretary of State are in a much better position than is this court to decide whether there is a potential loophole, and if so, whether, and, if so, how it should be closed. Third, the Regulations are technical provisions designed to achieve uniform treatment, for the purposes of the NMW, of a wide range of different facts, as both the ET and the EAT recognised. The Regulations deal not only with four different ways in which workers may be paid, but also make detailed provision for each method of payment, and for the treatment of hours spent in such activities as training and travel. A fourth related starting point is that, unlike some tax legislation, there are, with the exception of section 49(1) of the Act, no explicit anti-avoidance provisions in the Regulations. HMRC did not suggest that section 49 was relevant to this appeal.

Those starting points have two related consequences. First, this court must work out what the Regulations mean. This court should be especially reluctant to be lured by the invocation of a ‘purposive construction’ from giving effect to the meaning of the words of the Regulations, if their meaning is clear. The ET and the EAT, both closer to the facts than is this court, emphatically resisted that temptation (albeit in relation to different strands of HMRC’s argument: see paragraphs 268-271 of the ET’s judgment, and paragraph 48 of the EAT’s judgment: paragraphs 87-88, below, and paragraph 54, above). So should we. Second, if section 49 does not apply, the court should not fill any perceived gap under the guise of a purposive construction of the Regulations. The approach of both tribunals to this issue was therefore correct.

What is the correct approach to understanding the Regulations?

As the EAT pointed out, ‘work’ is not defined in the Regulations. ‘Work’ is an ordinary English word, but ‘time work’ is not an ordinary English phrase. ‘Time work’ is a technical phrase used by the draftsman of the Regulations to express one of the important concepts in this legislative scheme. Regulation 30 is what I have called ‘the primary definition’ of time work, but that definition is refined by the provisions which follow it, by which some activities are said to be time work, and others are to be ‘treated as’ time work. In order to understand what ‘time work’ is, it is therefore necessary to explore the ways in which that concept is shaped by its use in different provisions of the Regulations, and not just by reading regulation 30. In this technical field, in particular, it is essential that the relevant provisions are read together in order to understand the meaning which the draftsman intended to convey by that technical phrase.

I therefore agree with the EAT that Mencap, by which both the EAT and this court are bound, decides that the relevant regulations must be read as a whole. In particular, it is neither sensible nor possible to decide, in a particular case, whether travelling is time work for the purposes of regulation 30 without also taking into account regulation 20, which defines travelling, and regulation 34, which deals with travel in the situations to which it applies.

I accept Miss Hughes’s submission that ‘sleeping’ is a binary concept (a person is either asleep or awake) and that ‘travel’, as expounded in the Regulations, is not. She argued that it followed from that distinction that the basic approach to construction in the Mencap case cannot be ‘read across’ to this case. I reject that second argument. Whether the specific provisions of the Regulations which are relevant to a particular dispute should be read as a whole before their meaning can be ascertained cannot depend on such an arbitrary and unprincipled distinction.

Miss Hughes gave another reason for distinguishing the approach to construction in the Mencap case. She submitted that the Supreme Court’s construction of the Regulations in the Mencap case was either based on, or heavily influenced by, the fact that it accorded with a recommendation made by the LPC in a statutory report. There is no such support in any report of the LPC for the EAT’s construction of the Regulations, she said.

I also reject that submission for four reasons. The first and most significant reason is that this submission has no logical bearing on the question whether or not the relevant regulations should be read together before their meaning can be understood. That approach to the construction of the Regulations is an independent and binding feature of the reasoning of the Supreme Court in Mencap.

The second reason is closely linked with the first. I agree with the EAT’s understanding of the judgments in Mencap that the construction of the Regulations in those judgments was not decisively influenced by the recommendation of the LPC, but, rather, that the LPC’s recommendation served to confirm a construction already grounded in the words of the Regulations. None of the judgments links this approach to interpretation to the LPC report or to any other legal or factual aspect which was unique to the Mencap case. The EAT considered this argument in paragraph 41 of its judgment. It correctly observed: ‘Nowhere do the judges of the Supreme Court indicate that the purposive interpretation has led them to adopt a meaning for the legislation that they would not otherwise have given it’.

The third reason is that this case is different from Mencap precisely because the provisions which were at issue in that case had been the subject of a clear recommendation in the LPC’s first report, which has a particular statutory significance, and Miss Hughes did not show us any relevant material from any LPC report which is relevant to regulations 30 and 34.

The fourth reason flows from the third reason. I have already rejected HMRC’s argument that Lady Arden adopted a purposive construction which depended on what the LPC had recommended. HMRC’s further submission seems to be that because there is no material in any LPC report to control the court’s approach in this case, the court may adopt purposive approach to the relevant provisions which is wider than that of Lady Arden. I reject that submission also, for two reasons. First, there is little guidance about the basis of this approach, other than its broad description, which is that it is to protect workers from exploitation. Second, it follows that there is no guidance about how this approach can or should displace the clear words of the Regulations. Within the constraints of sections 5-8, and of public law, the Secretary of State can ultimately make any regulations he chooses, whether or not they have the support of a recommendation by the LPC. The court’s task is to interpret the words of the Regulations, and, if they are clear, as they are here, to give effect to them.

I therefore also reject Miss Hughes’s further argument that it was open to the ET to reach even a provisional conclusion that the travel in this case was ‘time work’ for the purposes of the regulation 30 in isolation, without first revisiting that provisional conclusion by reference to regulation 34, which specifically deals with travel. The ET was bound by Mencap to interpret the relevant provisions of the Regulations as a whole, and not in isolation from each other. I therefore agree with the EAT that the ET erred in law by reaching a decision based on regulation 30 alone, and by not using regulation 34 to inform that decision.

That conclusion also disposes of Miss Hughes’s further argument that the ET’s decision that the travel was ‘time work’ was a finding of fact, or an expert assessment, with which, as is well known, this court could only interfere on limited grounds. If, as I consider it was, the ET’s finding of fact or expert assessment was based on a misunderstanding of the law, it cannot stand. I have already described that misunderstanding in the previous paragraph of this judgment.

What does regulation 34 mean?

It follows from what I have already said that a court cannot decide whether the travel in this case was time work for the purposes of the Regulations without considering the whole of Chapter 3, including regulation 34. The starting point for this exercise is regulation 35(1) which provides that hours when a worker is absent from work are not treated as hours of time work except as specified in regulations 32-34. The reference to regulation 34 makes it clear that the draftsman understood absence from work to include time spent travelling.

The meaning of regulation 34 is also clear. The heading advertises that regulation 34 is a deeming provision, as the ET recognised (paragraph 256). It therefore suggests that the draftsman considered, consistently with regulation 35(1), that time spent travelling would not be time work, unless it is, by virtue of regulation 34, ‘treated as’ time work.

Regulation 34(1) creates a general rule which is subject to an exception. The general rule has two cumulative conditions. The general rule is that, if a worker is travelling (a) for the purposes of time work and (b) at a time when he would otherwise be working, that time is treated as hours of time work for the purposes of the NMW. The exception to that general rule is that time spent in travel which meets those two conditions but which is between the worker’s home and his place of work, or a place where an assignment is carried out, is not treated as hours of time work. The effect of the rule and that exception, therefore, is that time travelling is not treated as hours of time work if (a) it is not for the purposes of time work, or (b) it not done at a time when the worker would otherwise be working, or (c) it is travel between the worker’s home and the place where he carries out an assignment.

Regulation 34(2) supplements that analysis. The purpose of regulation 34(2) is to make clear that what periods of travel are treated as included in the phrase ‘where the worker would otherwise be working’, in two different cases. The first is hours when a worker is travelling for the purposes of work between different places of work which are not occupied by the employer. I will refer to such a worker as a ‘peripatetic worker’. The second is when the worker is travelling and it is not certain whether the worker would otherwise be working because his hours of work are vary (either in their length or in their timing).

Did the ET understand and apply regulation 34 correctly?

The ET understood that hours spent travelling for the purposes of time work, when the worker ‘would otherwise be working’, are ‘treated as time work’. It also understood that if the travel was at a time when the worker would not otherwise be working, that travel time is not to be treated as hour of time work, regardless of the purpose of that travel. The ET, therefore, was not only entitled, but bound, as it did do, to investigate whether or not, when they were travelling, the workers ‘would otherwise be working’. That ET had to decide, therefore, whether the travel time in this case was at a time when the worker would otherwise be working (as that phrase is to be understood in normal usage, and taking account of regulation 34(2)).

To anticipate somewhat, its finding of fact (see further, paragraphs 84 and 85, below) that the time when the workers were travelling was not time when they ‘would otherwise be working’, even when that phrase includes the cases described in regulation 34(2), is a conclusive answer to the questions posed by regulation 34, and means that the travelling time could not count as time work for the purposes of the NMW. I will nevertheless (out of caution) consider all of the ET’s reasoning to see whether or not it is flawed, or could possibly undermine the conclusiveness of that finding of fact.

The ET acknowledged, first, that if a worker is working during a train journey, the hours would count as time work in any event (paragraph 256). The ET then recognised that ‘If the worker cannot be said to be working during travel time’, it was necessary to consider ‘regulation 34 to see if the relevant hours are nonetheless deemed to be treated as hours of work’. It correctly recognised that the ‘starting point’ is that hours spent travelling when the worker ‘would otherwise be working’ count as time work. That would ‘clearly cover business travel during the working day’. Time spent on the daily commute was not ‘covered by regulation 34, at least where the worker has a set start and finish time’ (because that was not time when the worker would otherwise be working) (paragraph 258). I can see no arguable error in that stage of the analysis; indeed, it is correct.

‘Similar reasoning’ applied where the worker was required to work away from his usual place of work on a particular day ‘(but is to start at his normal time); this commuting would not count either as time work, even if the journey is significantly longer than normal’ (paragraph 259). I can see no arguable error in that stage of the analysis, either; indeed, it is correct.

The ET quoted regulation 34(1)(a). The ET appreciated that it expressly excludes time spent travelling between the worker’s permanent or temporary home (where he is not in the temporary home for work purposes). The ET thought that these words ‘may well be considered not necessary to exclude commuting time because, such hours (as I have stated above) are not time when the worker would otherwise be working and so are not covered anyway’ (paragraph 260, original emphasis).

The ET noted that regulation 34(2) gives two ‘instances of travelling time when the worker “would otherwise be working”, and which are therefore treated as time work’ (original emphasis). First, it covers peripatetic workers and the time they spend travelling between assignments. Second, it also covers circumstances in which the worker was travelling and it was uncertain whether the worker would otherwise be working because his working hours varied (paragraph 261). I can see no error in the ET’s understanding of regulation 34(2).

If regulation 34 did apply, and travelling time was not work within regulation 30, the travelling time ‘would not be hours when the Workers would otherwise be working’ (original emphasis). HMRC did not ‘allege that if the workers had not been picked up at 2am they would have been catching chickens etc from that time, they would have been doing this type of work only as and when they arrived at the site, at, for example, 7am’ (paragraph 262). That conclusion was not only open to the ET on the facts, but obviously correct.

The ET then considered whether the workers would ‘otherwise been working’ within the definition in regulation 34(2)(a). The ET considered that the natural meaning of this provision (‘between which’) was that it was intended to cover ‘a situation where the worker is travelling from one place to another to do assignments’. This case was not concerned with such travel, but with travel from home, or from the employer’s premises, to the first site. This provision did not therefore apply to the travel in issue, but would apply to ‘their travel between sites’ (paragraph 264). That conclusion was not only open to the ET on the facts, but obviously correct.

After that, the ET considered regulation 34(2)(b). It asked itself ‘when the Workers are travelling to the first site, is it uncertain whether they would otherwise be catching chickens etc because their hours vary as to the length or times when they are to carry out this work?’ The ET’s conclusion, on the evidence, was that regulation 34(2)(b) did not apply. ‘While the locations and start times varied, the Workers knew in advance what time they were due to start work.’ The ET did not accept ‘that while they were travelling they did not know whether they would otherwise [be] on the farms carrying out the physical activities of their role. They were told, at least the evening before, about the arrangements’ (paragraph 265). That conclusion was not only open to the ET on the facts, but obviously correct.

The ET recorded, in paragraph 266, the Respondents’ argument that even if time on the minibus had been time when the Workers would otherwise be working, it would be ‘exempted anyway under regulation 34(1) because they were travelling from home to a place where they would carry out their assignment ‘(i.e. not from the employer’s premises)’. The workers could have been compelled under the contract to start at the employer’s premises, but ‘in practice they did not other than occasionally’. The regulations did not ‘stipulate’ that the terms of the contract were relevant (paragraph 266). Arguments about normal commuting were irrelevant. Regulation 34 did not refer to commuting, but to travel at a time when the worker ‘would otherwise be working’, and ‘applies exemptions to that’ (paragraph 267). That conclusion was not only open to the ET on the facts, but obviously correct.

In paragraph 268 the ET recorded HMRC’s invitation ‘to apply a purposive approach’. The ET’s response was that that was an invitation ‘to put a gloss on the meaning of regulation 34’. The ET added, in paragraph 269, that ‘The wording is clear, and it does not restrict the amount of excluded travelling time’. The ET also added that HMRC could not explain what any such restriction should be: ‘is it all travelling time above 2 hours, or what may be deemed reasonable?’. That conclusion was not only open to the ET on the facts, but obviously correct. The ET, as the fact-finder in this legislative scheme, was particularly well placed to comment about the difficulty of devising and applying such an uncertain approach to the facts. This part of the ET’s reasons echoes an analogous point made by Lady Arden in paragraph 66 of her judgment in Mencap (see paragraph 35, above).

Nor was the submission that travel like this was not the target of regulation 34, which was aimed at ‘much more limited time’, any more persuasive. ‘But at what travel is it directed?’ There was no relevant material which helped the ET with that question (paragraph 270). In paragraph 271 the ET rejected the argument that regulation 34 should not be construed ‘so as to exclude protection by giving the employer the choice as to whether to commence the lengthy work-related journey either from home or at the employer’s premises’. Regulation 34 said nothing about ‘the contractual situation regarding what the travel arrangements are’. I repeat the comments I made in the last two sentences of the previous paragraph.

The ET’s conclusion was that ‘the relevant travelling was between the Workers home and the first site and if not held of itself to be time work under regulation 30/the contract, would fall within the exception in regulation 34(1)(a) and (b) but only of course, where the worker would otherwise be working (which is not applicable here because it is not argued by [HMRC] that the Workers would otherwise be carrying out any work if they were not travelling in the minibus’ (original emphases). That conclusion was not only open to the ET on the facts, but obviously correct.

The answer, therefore, to the linked questions which start this section of my judgment is ‘Yes’.