Many employers are familiar with this scenario: Employees (often sales representatives) drive from their homes to customer appointments, and the question arises whether the employees are entitled to be paid for this travel time. One thing has been clear up until now: Employers can’t expect employees to accept regular travel time for work-related appointments without remuneration. But should the employer bear the full cost? Yes, says the German federal labour court (BAG) for the first time in its recent decision.
What was the case about?
The plaintiff is employed by the defendant company in the field as a service technician. The defendant is bound by the regional collective agreement for wholesale and foreign trade. These collective agreements apply to the plaintiff’s employment relationship on the basis of a dynamic contractual reference clause. The collective agreement contains a regulation stating that all activities an employee performs as primary contractual obligations are to be compensated. The collective agreement does not contain an opening clause allowing for different company agreements.
However, the defendant company has had an internal work agreement since 2001 that stipulates that travel to arrive at the first customer and return from the last customer does not count as work hours if the journey does not exceed 20 minutes. Travel exceeding 20 minutes only counts as work time if arrival and departure take longer than 20 minutes each.
On the basis of this company agreement, the defendant employer did not include the first 20 minutes of the first and last trips to the plaintiff’s working time and, consequently, did not pay for this time.
In his complaint, the plaintiff requested that his working time be credited for travel from March to August 2017 of 68 hours and 40 minutes, or, in the alternative, that he be paid EUR 1,219.58 gross plus interest. The defendant sought dismissal. The lawsuit was dismissed twice and the plaintiff appealed.
The BAG overturned the decision of the lower court and referred the legal dispute back to the regional lower court (LAG) of Düsseldorf for a new hearing and decision.
In principle, journeys to the customer, regardless of whether they are made from the company or from home, constitute working time according to established case law. It has not been clear whether this must also be remunerated; the BAG’s decision assumes, however, that there is a right to remuneration. In the opinion of the BAG, this right was also not excluded under the company agreement, since it related to a matter already regulated by a collective bargaining agreement.
The BAG is thus opposed to the lower courts, which came to the conclusion that the company agreement does not regulate the remuneration obligation or the weekly working hours, so there is no collective bargaining precedence. Rather, in the lower courts’ view, the company agreement merely determines which travel times of the employee are deemed to fulfil his primary contractual obligations. They held that the agreement was therefore effective.
The decision of the BAG may be correct in terms of content, but in practice the result is anything but in line with the interests of most employers and employees.
For most companies, clauses similar to the one at issue are common and reflect a fair balance of the interests of both parties to the employment contract. It is only by limiting the remuneration for the first and last customer trip in excess of 20 minutes that the employer can avoid showing preference for field staff as compared to employees in the office. After all, the latter also receive no remuneration for travel time to and from the office. There is no reason why employees who start their daily work from home, and therefore have no travel time to the workplace, should not have to spend any unpaid travel time.
Nevertheless, the BAG decision will have to be taken into account in the future. Employers should examine whether, according to this case law, collective bargaining regulations in their case also operate to preclude company agreements on limited remuneration of travel time. If applicable, there may be a clause in the collective bargaining agreement which (unlike in the case here) allows for deviating work agreements.
If such an opening clause does not exist, the employers’ associations will need to enter into negotiations on the collective agreements and demand such opening clauses for work agreements. This is the only way to prevent an unjustified privilege for field staff and to find a fair balance for all employees.