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Is travelling to work counted as "work" - the ECJ thinks so!

September  25, 2015

Time spent travelling to and from first and last appointments by workers without a fixed office should be regarded as working time, the European Court of Justice (ECJ) has ruled.   This time has not previously been considered as work by many employers.  It means firms including those employing care workers, gas fitters, plumbers, other tradesmen and even sales reps service technicians and engineers may be in breach of EU working time regulations.



Employers may have to organise work schedules to ensure workers' first and last appointments are close to their homes. Thousands of employers may now potentially be in breach of working time regulation rules; today. John Shanahan of John M Shanahan Accountants, Tullamore, Co Offaly  outlines the implications for Irish employers and self employed persons with no fixed place of work.

The case was brought to the European Court of Justice by employees of a Spanish security company who argued that the time they spent travelling from home to their first appointment should be classed as work, in accordance with the EU’s working time directive.

Wage Cost.

The judgement amounts to a significant tightening of European labour rules, and could force companies to hire more workers to remain in the law.
The ruling could also force companies to pay higher wages to avoid breaking minimum wages laws, as well as giving employees more breaks.

The case was brought by workers at Tyco, a Spanish company that installs burglar alarms.
While workers drove for up to three hours to clients’ premises, the company counted their working day for the purposes of the directive from the moment they arrived at the first client to the moment they left the last one.
The court ruled that was wrong, and said travelling time counts as “work” for employees such as tradesmen who do not have a fixed office.

Whilst this decision is not about the national minimum wage, which is not subject to European law and the wording of the Act is different, it may also have implications for what employees must be paid.

The judgment could have unintended repercussions in that some companies could react by turning to flexible or zero-hours contracts. The need to pay employees for travel time means that for some businesses the servicing of clients in remote areas may no longer be profitable.

Travel & Subsistence Cost

The Revenue have for many years taken the view that while the cost of such travel is an allowable expense for tax purposes, the journey from home to the first appointment, as well as the journey home from the last, is ordinary commuting, and therefore the allowable mileage is limited to the shorter of the distance from the employee’s home to the work location, or the employer’s base (which Revenue regards as the normal place of work) and the work location.

The reasoning behind this lies in the tax legislation dealing with employee expenses, which requires that the cost must be incurred while ‘travelling in the performance of the duties’. While this may seem a straightforward requirement at first sight, historically, it has proved a difficult test to satisfy. This is largely due to UK case law dating back to the early part of the last century, which interpreted the legislation essentially as meaning that the work did not begin until the point when the individual arrived at the work site. Any travel up to that point was merely "preparatory".

If the ECJ’s interpretation were applied to the tax legislation, it would seem difficult to deny that the travel was undertaken while "travelling in the performance of the duties" and that in similar circumstance, the cost of travel should be considered an allowable expense.

Health & Safety

The court said its judgement was about protecting the "health and safety" of workers as set out in the European Union's working time directive.
The directive is designed to protect workers from exploitation by employers, and it lays down regulations on matters such as how long employees work, how many breaks they have, and how much holiday they are entitled to.
One of its main goals is to ensure that no employee in the EU is obliged to work more than an average of 48 hours a week.

We at Shanahan's  shall await developments with interest from the Department of  Finance, Revenue and even the Department of Jobs Enterprise & Innovation on foot of this ruling.


 Contact John M Shanahan Accountants for expert advice on
Taxation, Business Management, and Financial matters.

Phone 057 93 22100 or email or use our contact form here- Contact Form.

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