England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(HIS HONOUR JUDGE MCMULLEN QC,
MS K BILGAN and MISS D WHITTINGAM)

		Royal Courts of Justice Strand London, WC2
		8th November 2004

1. LORD JUSTICE PETER GIBSON: This is an appeal by Alpha Catering Services Ltd, trading as Alpha Flight Services ("Alpha"), from the order made by the Employment Appeal Tribunal ("EAT") on 17th March 2004 whereby it allowed the appeal of Mr JP Gallagher and 27 other employees of Alpha (together "the Employees") from the decision of an Employment Tribunal ("ET") sitting at London South. By that decision, sent to the parties on 7th October 2003, the ET determined that the Employees were excluded by Regulation 21(c) of the Working Time Regulations 1998 ("the Regulations") from the right under Regulation 12 to rest breaks. Accordingly, the ET dismissed the Employees' originating applications. On certain other points in dispute the ET decided in favour of the Employees and the EAT upheld the ET's decision on those points.
2. Alpha applied for permission to appeal against the EAT's decision on the Regulation 21(c) point and the EAT granted such permission. Alpha sought but was refused permission to appeal against the EAT's affirmation of the ET's decision on the other points.
3. By its appellant's notice Alpha sought such permission from this court. At the hearing of the appeal we heard Alpha's application for permission to appeal on three points. I will deal with that application after I consider Alpha's application on the Regulation 21(c) point.

The Regulations

4. The Regulations are derived from Council Directive 93/104/EC of 23rd November 1993, commonly known as the Working Time Directive ("the Directive"). The Directive lays down, as is stated in Article 1.1, minimum safety and health requirements for the organisation of working time. Article 1.2 provides that the Directive applies to minimum periods of daily rest, weekly rest and annual leave, to breaks and maximum weekly working time. By Article 2.1 various definitions are given. Relevant to this appeal are the definitions of "working time" as meaning "any period during which the worker is working, at the employer's disposal and carrying out his activity or duties, in accordance with national law and/or practice" and "rest period" as meaning "any period which is not working time".
5. Article 3 provides for daily rest. Article 4 relates to breaks and is in this form:

"Member States shall take the measures necessary to ensure that, where the working day is longer than six hours, every worker is entitled to a rest break, the details of which, including duration and the terms on which it is granted, shall be laid down in collective agreements or agreements between the two sides of industry or, failing that, by national legislation."

6. Article 5 relates to a weekly rest period, Article 6 to maximum weekly working time and Article 7 to annual leave.
7. The Directive provides by Article 15 that member states are entitled to apply or introduce provisions more favourable to the protection of the safety and health of workers than is provided by the Directive.
8. Certain derogations are permitted in Article 17, paragraph 2:

"Derogations may be adopted by means of laws, regulations or administrative provisions or by means of collective agreements or agreements between the two sides of industry provided that the workers concerned are afforded equivalent periods of compensatory rest or that, in exceptional cases in which it is not possible, for objective reasons, to grant such equivalent periods of compensatory rest, the workers concerned are afforded appropriate protection: ..."

9. Paragraph 2.1 then proceeds, so far as relevant, in this way:

"from Article 4 ...

(c) in the case of activities involving the need for continuity of service or production, particularly: ..."

I break off at this point to say that there then follow eight numbered paragraphs, of which six specify activities or industries and two specify particular types of workers. Sub-paragraph (ii) refers to "dock or airport workers". Paragraph (viii) refers to "workers concerned with the carriage of passengers on regular urban transport services". A further derogation from Article 4 is permitted by Article 17.2.1(d):

"where there is a foreseeable surge of activity, particularly in:

(i) agriculture;

(ii) tourism;

(iii) postal services; ..."

10. The Regulations were intended to implement the Directive. For the most part they follow the language of the Directive, although there are some, in my view minor, differences. Regulation 2 contains definitions of "rest period" and "working time" which accord with the Directive's definitions. As in the Directive, there is no definition in the Regulations of a break or a rest break.
11. Regulation 12(1) sets out the basic entitlement of a worker to a rest break where his daily working time is more than six hours. By paragraph (2):

"The details of the rest break to which an adult worker is entitled under paragraph (1), including its duration and the terms on which it is granted, shall be in accordance with any provisions for the purposes of this regulation which are contained in a collective agreement or a workforce agreement."

There is no relevant collective agreement or workforce agreement. By paragraph (3):

"Subject to the provisions of any applicable collective agreement or workforce agreement, the rest break provided for in paragraph (1) is an uninterrupted period of not less than 20 minutes, and the worker is entitled to spend it away from his workstation if he has one."

The ET found that the Employees had no workstation.

12. Regulation 18 provides for Regulation 12(1) not to apply (inter alia) to certain sectors of activity, including air transport, or to the activities of doctors in training.
13. Derogations from Regulation 12(1) include the following in Regulation 21 (headed "Other special cases"). By Regulation 21(c), subject to Regulation 24, Regulation 12(1) does not apply in relation to a worker:

"where the worker's activities involve the need for continuity of service or production, as may be the case in relation to -

...

(ii) work at docks or airports."

14. By Regulation 21(d), subject again to Regulation 24, Regulation 12(1) does not apply in relation to a worker:

"where there is a foreseeable surge of activity, as may be the case in relation to -

(i) agriculture;

(ii) tourism; and

(iii) postal services".

15. Regulation 24 entitles a worker to compensatory rest in these terms:

"Where the application of any provision of these Regulations is excluded by regulation 21 ... and a worker is accordingly required by his employer to work during a period which would otherwise be a rest period or rest break -

(a) his employer shall wherever possible allow him to take an equivalent period of compensatory rest, and

(b) in exceptional cases in which it is not possible, for objective reasons, to grant such a period of rest, his employer shall afford him such protection as may be appropriate in order to safeguard the worker's health and safety."

The facts

16. Alpha is a large company in the airline catering business. A substantial part of its work consists of the delivery to and loading onto aircraft of airline meals, drinks and sundry items, and what is known as the "de-catering" of aircraft which have arrived, that is to say the unloading of catering material from such aircraft.
17. Alpha services airlines which use Gatwick Airport. It has premises near to the airport. There food is prepared and packed, and drinks and other items stored. Among its 400 employees at Gatwick are those in the Service Delivery Department, numbering between 150 and 170 persons. They have duties connected with the transportation of food and other items to and from the airport. They include drivers, designated FEH1s; loaders, FEH2s; and service team representatives, STRs. The Employees are FEH1s or FEH2s or STRs.
18. The ET made the following findings of fact:

"(4) FEH1s and FEH2s work together on shifts as teams of two. Their working days start and finish at [Alpha's] premises. Their main function is to load their heavy goods vehicle, drive it to the airport, deliver food and equipment to the aircraft and/or 'de-cater' them and return whatever has been removed to [Alpha's] premises. The round-trip (including stops to collect drinks from the nearby bonded warehouse) is typically 6 to 7 miles in total. It seems that, generally speaking, a team will complete two round trips per shift.

(5) Very often there are intervals when FEH1s and FEH2s are at the airport but have no duties to undertake immediately. Such time is usually referred to as 'downtime'. During downtime the driver/loader team must maintain radio contact with [Alpha]. A hand-held radio is provided and one member of the team must have it in his possession at all times. The FEH1s and FEH2s do not have access to the airport facilities. Unlike the STRs, they are not provided with passes enabling them to enter the airport buildings. There is a toilet which they can use and a designated 'smoking shed'. Many take refreshments with them and consume them during downtime. During downtime drivers and loaders will ordinarily remain in their vehicles or very close by. They are not permitted to sleep during downtime and it is understood that they are at their employer's disposal.

(6) STRs discharge supervisory roles, ensuring that vehicles are duly loaded and sealed at the depots and that the loading and 'de-catering' operations at the airport run smoothly. They are required to hold a driver's licence and are provided with a van. They have an airside pass giving them access to certain parts of the airport. Like the drivers and loaders, they have downtime on occasions. They are obliged to maintain radio contact with [Alpha] and may take refreshment within the airport building if time and circumstances permit.

(7) [Alpha's] work is time-critical. The 'window' for loading and (where necessary) unloading is typically 35 minutes in the case of a short-haul flight and 70 minutes where international flights are concerned. The time pressure is increased by the fact that other service providers (such as cleaners) must also have access to the aircraft during the turnaround period. [Alpha] is liable to financial penalties where an aircraft is delayed owing to their failure to complete their duties within the prescribed time. Those penalties are payable under the terms of their contracts with the airlines they serve.

(8) Not surprisingly, there are fluctuations in the amount of work which [Alpha] must carry out. Most weekdays are busy in the mornings and quieter in the afternoons. In the weekly cycle Fridays and Sundays are busier than other days. Self-evidently, during holiday times traffic volumes increase. Ms Nicol [a witness for Alpha] told us, and we accept, that during a morning shift on a Monday there may be 25 flights leaving Gatwick for which [Alpha is] responsible, and that during the corresponding shift on a Saturday the number may be no more than 10. We accept her evidence that in a busy week [Alpha] may service 1,100 aircraft, whereas in a quiet week the figure may be as low as 800.

(9) Fluctuations in activity may arise not only from predictable cyclical causes but also as a result of unforeseeable events. For example, fog may cause long delays before aircraft are permitted to land. Once the fog lifts there is likely to be particularly heavy demand upon [Alpha's] services for a limited period of time."

The proceedings before the ET

19. The Employees presented originating applications, by which they complained that Alpha unlawfully denied them rest breaks to which they were entitled under Regulation 12(1). Mr Gallagher's originating application referred to seven specific recent occasions when Alpha had required that he work for more than six hours without a rest break.
20. In its notice of appearance Alpha disputed the jurisdiction of the ET on the ground that the Employees had no right under the Regulations to take rest breaks. Among the provisions on which it relied were Regulation 21(c) and (d). It also claimed that downtime (that is to say time during which the employee is not actually doing work, but is waiting for the next loading or de-catering assignment), when of not less than 20 minutes of uninterrupted duration, qualified as a rest break. It gave factual statistics which showed that the days to which Mr Gallagher referred were days on which he had substantial amounts of downtime.
21. At a case management hearing on 14th March 2003 the ET directed a preliminary hearing to determine whether and to what extent the Employees' claims were sustainable in law. Certain issues were identified and they, together with a further issue on which the ET was invited to rule, were the issues decided by the ET at a hearing on 9th July 2003.
22. The issues which the ET decided relevant to this appeal and to the application for permission to appeal and the conclusions which the ET reached on those issues were the following:

(1) Are the Employees (or any of them) deprived of the protection of Regulation 12(1) by operation of Regulation 21(c), on the ground that their activities involve the need for continuity of service or production?

The ET held that the activities of each category of the Employees involved the need for continuity of service or production, and so the protection of Regulation 12 was excluded for all the Employees.

(2) Are the Employees excluded from the protection of Regulation 12(1) by operation of Regulation 21(d) where there is a foreseeable surge of activity?

The ET held that routine increases and decreases of activity occurring naturally in the daily and weekly cycle were not surges of activity within the meaning of the Regulation, and so did not exclude the protection of Regulation 12(1). However, the ET said that it would be a matter for evidence whether Regulation 12(d) was brought into operation as a consequence of foreseeable increases in activity during particularly busy periods of the year.

(3) Does downtime of not less than 20 minutes' uninterrupted duration qualify for the purposes of Regulation 12(3) as a rest break?

The ET held that periods of downtime did not amount to rest breaks within the meaning of Regulation 12(3).

23. The ET accordingly dismissed all the originating applications for want of jurisdiction.

The appeal to the EAT

24. The Employees appealed against the ET's decision on issue (1). Alpha cross-appealed on the ET's decision on three issues, but only proceeded on its appeal against the decision on issues (2) and (3).
25. The EAT allowed the Employees' appeal and dismissed Alpha's cross-appeal. The EAT directed itself by reference to the following, amongst other, legal principles:

(1) The three elements in the definition of working time in Regulation 2(1), that is to say any period during which the worker is working, at his employer's disposal and carrying out his activity or duties, are to be construed conjunctively.

(2) It is relevant to look at the relationship between the definition of working time and other times since there is no definition of rest break.

(3) Derogations from the Directive, and thus the exclusion of workers from protection under a health and safety measure, should be construed strictly.

26. The EAT found that it was the worker's activities which by Regulation 21(c) required continuity rather than the activities of the employer. It held that as a matter of construction Regulation 21(c) excludes a worker's right to rest breaks where his or her activities involve the need for continuity of service, rather than when his or her employer's activities involve that need. If wrong on that, it said that it would nevertheless uphold the Employees' contention that the ET had yet to deal with a claim under Regulation 24 for compensatory rest breaks, and that it would allow the appeal on that ground.
27. On Regulation 21(d) the EAT accepted the approach of the ET to the concept of a surge. It held that the ET was entitled to find that the relatively modest fluctuations which Alpha experienced over the working day and week could not be described as surges. On downtime the EAT said that the ET made a factual determination about what the workers were required to do in their downtime, and that the EAT should not disturb the ET's judgment on that point.

The appeal to this court

28. In addition to appealing to this court on the Regulation 21(c) point, Alpha seeks permission to appeal on the Regulation 21(d) point, the downtime point and the ground which the ET said that, if wrong on the Regulation 21(c) point, it would have allowed the appeal, that is to say, Regulation 24.
29. On Alpha's appeal Mr Peter Oldham, for Alpha, submits that the ET was right and the EAT was wrong on Regulation 21(c). He points out, by reference to paragraph 6(7) of the ET's decision, that Alpha's work was time-critical, that there was a short window for loading and unloading, and that that time pressure was increased by the need for other service providers to have access to the aircraft during the turnaround period, and that Alpha was liable to financial penalties if there were delays due to its failure to complete its duties within the time available.
30. Mr Oldham further points out that in paragraph 12 the ET found that the activities undertaken by FEH1s, FEH2s and STRs clearly involved the need for continuity of service or production. He says that the ET looked at the Employees' activities collectively, and so in effect looked at Alpha's business. He also drew attention to the fact that the ET accepted that derogations from rights provided by EU legislation should be narrowly construed, that the ET noted that both the Regulations and the Directive envisage the derogation applying in respect of work at airports and that employees who could not rely on Regulation 21 could, where appropriate, rely on Regulation 24 to have compensatory rest breaks.
31. Mr Oldham criticised the EAT for accepting the contention of the Employees that Regulation 21(c) focuses upon the workers' activities and not that of the employer. That, he says, was not consistent with the Directive, in accordance with which the Regulations fell to be construed.
32. In paragraph 12 of its decision, the ET expressed its brief reasoning on the Regulation 21(c) point. It started by saying that it appeared to it on the face of it that the activities undertaken by each category of the Employees clearly involved the need for continuity of service or production. It added that the reference to work at docks or airports reinforced what it called "this initial view". It then accepted the argument of Mr Andrew Hogarth QC, for the Employees, that it was a central principle of Community jurisprudence that derogations from a right prescribed by a Directive had to be narrowly construed. It referred to the purpose of the Directive as being to ensure that health and safety rights should be made available to the greater part of the workforce within the Community. It then continued:

"The difficulty, however, is that the exclusion itself is unqualified. Moreover, it seems to us that the Directive, and the Regulations, clearly envisage the sort of activities undertaken by the [Employees] as falling within the exception, since they give work at docks or airports as a particular instance of the kind of activity in which the need for continuity of service or production is acknowledged as arising. The time pressures under which onboard catering services must be completed, and the potential consequences, in terms not only of financial penalties upon [Alpha] but also disruption of a fundamental public service, are, to our minds telling factors."

33. In the passage cited, the ET plainly focuses on the employer's activities and to my mind that throws light on its "initial view" which it asserted without explanation in the first sentence of paragraph 12, that the activities of the Employees involved the need for continuity of service or production. The statistics in paragraph 6(7) of the decision do not support the view that the activities of the Employees, as distinct from their employer, involve the need for continuity of service or production. It is not explained why the Employees, operating as they do in small units, cannot have their working time so organised as to have rest breaks within each six-hour period of working time. No doubt the working time of Alpha's employees would need to be carefully organised so that there would be an adequate number of workers available while others are taking a 20-minute rest break. But it has not been explained why the Employees' activities involve the need for continuity of service or production. In truth it is the employer's activities or need to which the ET must be referring in the first sentence of paragraph 12, and that is made express in the passage which I have cited from the latter part of paragraph 12. The question therefore is whether the ET was right to focus on the employer's activities and need, or whether it should have concentrated on those of the worker. That turns on the true construction of Regulation 21(c), as read in the light of Article 17.2.1(c) of the Directive.
34. Mr Oldham points to the fact that Article 17.2.1(c) is worded "in the case of activities involving the need for continuity of service or production". That, he says, is apt to describe, not what the worker is doing, but what the employer's function is. However, that is in an incomplete citation from Article 17.2.1(c), which continues, so far as relevant:

"particularly: ... to dock or airport workers."

35. The Directive is not very happily worded. Some preposition or prepositional phrase linking the activities with the workers is missing. However, to my mind it is tolerably clear that the "dock or airport workers" are intended to be related to the relevant activities, and that relationship I would understand to be that the activities are those of the dock or airport workers.
36. Mr Oldham suggests that because others of the numbered paragraphs in Article 17.2.1(c) refer to industries like agriculture, the reference to dock or airport workers can be construed as a reference to their employer's business. He poses the question: why, if the employees' contentions are correct, are the exceptions in the numbered sub-paragraphs, both of Article 17.2.1(c) and Regulation 21(c), stated so generally in terms of whole industries? He suggests that both the Directive and the Regulations were directed to the way employers in particular industries operate.
37. I am not able to agree with this submission. In Article 17.2.1(c) the numbered sub-paragraphs sometimes refer to specific activities or industries and sometimes to categories of workers. In Regulation 21(c) the numbered sub-paragraphs set out which activities of the worker may involve the need for continuity of service or production in relation to particular services, activities or industries. In neither the Directive nor the Regulations is there any reference to the employer. No doubt the activities of the worker are the activities of the employer in law, but the focus is on the activities of the worker rather than the employer, which activities involve the requisite need for continuity of service or production. The ET, in my judgment, erred in looking to the activities of the employer.
38. Mr Oldham asserts that the economic consequences of the Employees' interpretation would be devastating. That assertion is not backed by a finding of the ET, and I am not persuaded that so apocalyptic a consequence would flow if the Employees are right. No doubt health and safety requirements do add to the economic burdens of an employer, but that fact cannot justify an interpretation which the Directive and the Regulations would otherwise not allow.
39. The EAT found support for its view on this issue in what Advocate General Tizzano said in paragraph 40 of his opinion in Bowden v Tuffnells Parcels Express Ltd [2001] IRLR 838. Mr Oldham submits that paragraph 40 sets out the reasoning of the appellants in Bowden, and that such reasoning was rejected by the Advocate General in paragraph 21. I agree. The Bowden case was concerned with a different point. The EAT also refers to passages in the judgment of the European Court of Justice, but in my judgment they do not assist on this particular point.
40. However, for the reasons which I have already given, the conclusion reached by the EAT was in my judgment correct. As Mr Hogarth observed in his skeleton argument, any other interpretation would allow an employer to avoid the duty imposed by the Regulations by the simple expedient of not employing enough staff to cover for rest breaks.
41. I would dismiss Alpha's appeal on this point.

(2) Regulation 21(d)

42. Alpha seeks permission to appeal from the EAT's affirmation of the ET's decision that Alpha had not demonstrated that there were foreseeable surges in activities. The ET expressed its view on the meaning of surge thus, in paragraph 14:

"... the concept of a 'surge' is intended to refer to something much more extreme than the natural fluctuations in activity which most workers in most industries experience. The examples under paragraph (d) (again, taken from the Directive) point, we think, to exceptional levels of activity arising seasonally or on special days or during particular periods of the year, and not to routine increases and decreases in activity occurring naturally in the daily and weekly cycle."

43. The ET found that the relatively modest fluctuations which Alpha experienced within the working day and working week were not capable of amounting to surges within the meaning of Regulation 21(d).
44. Mr Oldham submits that there is no difference in principle between variations occurring daily or weekly, on the one hand, and variations occurring seasonally or on special days or during particular periods. He says that the variations faced by Alpha occurred just as naturally as those faced by other industries of different cycles, and he instances that it is just as predictable that Monday morning would see a surge of activity for Alpha as that Christmas would be busy for the Post Office, or that harvest time would be busy for farmers. On the facts found Mr Oldham points to the finding in paragraph 6(8) of the ET's decision that Monday mornings might see activity two and a half times as great as on a Saturday morning.
45. I would refuse Alpha permission to appeal on this point, as I do not think Alpha had a reasonable prospect of success on it. The ET was concerned with the meaning of an ordinary word, "surge", which was undefined and which it had to construe in the context of the Regulations, and in particular having regard to the heading of Regulation 21 that such surges would only occur "in special cases". In my view, it was correct in taking a restrictive view of this derogation and in holding that a surge only occurred when there is an exceptional level of activity, beyond the fluctuations experienced within the working day and working week, and that the evidence had not disclosed any such surge. I would not interfere with the ET's assessment and finding. Accordingly, I would dismiss the application on this point.
46. For the sake of completeness, I would add that it is not obvious that the reference to tourism in Regulation 21(d) causes the derogation to be applicable, or might cause the derogation to be applicable, to the circumstances of the Employees. But it is unnecessary to decide that point in view of the conclusion which I have reached on the meaning of surge.

(3) Downtime

47. Alpha seeks permission to appeal from the EAT's affirmation of the ET's decision that there was no rest break in the Employees' downtime. The ET in its consideration of this point said that it is of the essence of a rest break that the period of rest is the employee's own, and that an employee who is on call and may be summoned at any moment is not enjoying a rest break. It added in paragraph 20 of its decision:

"It does not (retrospectively) become a rest break because, fortuitously, 20 minutes have passed without the employee being interrupted. The essence of the entitlement under reg 12(1) is that the employee knows when his break begins that his time is his own until the period of the break has expired."

48. Mr Oldham submits that the Regulations impose no qualification on what a rest break may consist of, and no restriction on its scope is to be implied by reference to the Directive. All that is required for a rest break, he says, is that there is an uninterrupted period of at least 20 minutes which can be taken away from the workstation. By Article 4 the details of the rest break to which every worker is entitled where the working day is longer than six hours are to be laid down in collective agreements or agreements between the two sides of industry or in national legislation. Nothing is specified in the Regulations and, as I have already said, there is no relevant collective agreement or agreement between the two sides of industry.
49. Mr Oldham acknowledges that he is in difficulty if the meaning of "working time" is relevant to the meaning of rest break, because the authorities show that a period when a worker is required to be on call at the place of work so as to resume the performance of his duties immediately he is required to do so by his employer is working time, even if the worker is asleep during that period (see SIMAP v Conselleria de Sanidad [2000] IRLR 845 and Landeshauptstadt Kiel v Jaeger [2003] IRLR 804). But he submits before us today, contrary to what he had argued in his skeleton argument for this court, that working time and rest breaks are not mutually exclusive.
50. I would refuse permission on this point also, as in my view it is not a point on which Alpha had any real prospect of success. Whilst I accept on the authority of SIMAP (see paragraph 50 of the judgment of the European Court of Justice) that a period in which the worker is on call is not in itself sufficient to make that period working time, it seems plain to me that downtime in the present case, the incidents of which are stated by the ET in paragraph 6(5), cannot be a rest break, and a fortiori a period of downtime cannot retrospectively become a rest break only because it can be seen after it is over that it was an uninterrupted period of at least 20 minutes. The worker is entitled under Regulation 12(1) to a rest break if his working time exceeds six hours, and he must knows at the start of a rest break that it is such. To my mind a rest break is an uninterrupted period of at least 20 minutes which is neither a rest period nor working time and which the worker can use as he pleases.

(4) Regulation 24

51. The EAT said that even if wrong on Regulation 21(c), the originating application should not have been dismissed by the ET because there remained the question of whether the Employees were entitled to compensatory rest breaks under Regulation 24. Alpha submits that this was incorrect for several reasons. It is unnecessary to go into those reasons, and we have heard no argument on this point, in view of the conclusion which I have reached on the other points.
52. In the result, I would dismiss this appeal.
53. LORD JUSTICE BUXTON: I agree and there is nothing I wish to add.
54. LORD JUSTICE JACOB: I also agree.

ORDER: Appeal dismissed with costs assessed in the sum of £9,717.25; case remitted to the Croydon Employment Tribunal; the case is stayed for one month so that the parties can try to reach a sensible settlement.

(Order not part of approved judgment)