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Remuneration of travelling time – Field staff
Judgment of the Federal Labour Court of 18 March 2020 in Case No. 5 AZR 36/19
In the case of field staff, whose role is contingent upon them visiting customers, the time spent travelling to customers is part of their principal contractual duties and therefore must be remunerated as working time. This is regardless of whether the travel starts from the place of business or from the employee’s place of residence. However, a different remuneration rule may be agreed in employment or collective agreements for travel time as opposed to “true” activities, providing the minimum wage requirements are still met.
Facts of the case
The dispute involved the credit of working time that the employee (in this case a service technician) had spent travelling. The employer is bound by the Collective Agreement for Wholesale and International Trade for Lower Saxony. This collective bargaining agreement includes a rule that requires all activities carried out by an employee in the performance of his principal contractual duties to be considered, without restriction, as remunerable working time and paid at the level of the basic salary under the collective agreement. Parallel to the rules in the collective agreement, the works agreement within the employer’s company also contains a rule whereby the travel to the first customer and from the last customer for the day is not considered working time providing the travel does not take longer than 20 minutes. This means that, when the travel to and from the customer takes longer than 20 minutes, the time that exceed this limit counts as working time. The defendant relied on this rule when it rejected the credit on the working time account.
The judgment
The Federal Labour Court decided in favour of the employee and referred the case back to the Regional Labour Court (LAG) in Düsseldorf for retrial. In contrast to the legal position taken by the lower courts, the Federal Labour Court held that the rules in the works agreement on the remuneration of travel time are invalid, making it clear that the rules on the remuneration of travel time in a collective bargaining agreement may not be limited by a works agreement. The Federal Labour Court reasons that the works agreement is invalid as it infringes the rule in the first sentence of § 77 (3) Works Constitution Law (Betriebsverfassungsgesetz, BetrVG), which does not allow a works agreement to regulate remuneration and other conditions that are already fixed in the applicable collective agreement. Primarily, the time in question must be considered working time and must be remunerated, without restriction, at the level of the basic remuneration in accordance with the provisions of the applicable collective agreement.
The LAG Düsseldorf held the view that there was no express provision in the collective agreement so that a works agreement would not infringe the rule in § 77 (3) BetrVG and would therefore be admissible.
The Federal Labour Court took a different view. According to the Court, the relevant collective agreement provides that all activities, which an employee carries out in the performance of his principal contractual duties, must be remunerated in line with the basic salary under the collective agreement. For field staff, this includes the whole time spent travelling to and from the customer. As the relevant collective agreement does not contain any flexibility in favour of a divergent works agreement, the relevant rule in the works agreement is invalid as it infringes the rule in the first sentence of § 77(3) BetrVG.
Practical consequences
The judgment of the Federal Labour Court could have far-reaching consequences in practice. Many companies have similar rules in their works agreements. This is because normal employees, who work in the office, do not receive any payment for their daily travel from their place of residence to the office. That is why the legal treatment and remuneration of travel time for field staff is often a topic of discussion between employers and the works council. A typical compromise, such as that in the case in question, remunerates part, but not all of the travel time. Employers who fall under a collective agreement are advised to exercise caution given the latest judgment of the Federal Labour Court.
Practical tip
Employers, who are bound by a collective agreement, should assess their works agreements and see whether they contain restrictions similar to the provision examined by the Federal Labour Court and whether the collective agreement is also similar. Where this is the case, employers should examine whether these additional costs can be passed on to customers (e.g. through the introduction of travel or call out fees).