The Federal Labor Court (BAG - Judgment of 10.17.2018 – ref. 5 AZR 553/17) has found that travel times required in the context of a business assignment abroad are to be paid as a rule.

In the underlying case, an employee was posted by his employer to a construction site in China on a project. At the request of the employee, the employer booked a return flight in business class with a stopover in Dubai instead of a direct flight in economy class. After the employer paid the employee for the travel days, with only the contractually agreed remuneration for eight hours each day, the employee filed for legal action for compensation for another 37 hours on the grounds that the total travel time from his home to the external job and back should be compensated as if it were work time. The working relationship is covered by the collective bargaining agreement (CBA) for the construction industry, which in Section 7 No. 4.3 contains a provision for the compensation of necessary travel times.

The Labor Court dismissed the claim on the first level. The Regional Labor Court (LAG) upheld the appeal for the employee’s complaint. The employer’s appeal was partially successful when put before the BAG.

The BAG stated that the trip to and from the foreign office is solely in the interest of the employer and therefore should usually be remunerated as work, even if an employer sends a worker abroad temporarily. However, in the absence of sufficient findings by the LAG as to the extent of the actual travel time required by the employee, the BAG was unable to conclusively decide on the matter and therefore referred it back to the LAG for a renewed hearing and decision after the appeal judgment was set aside.

Whether the BAG based the claim for remuneration on the disputed CBA regulation of Section 7 No. 4.3 or the general regulation of Sections 611 (1), 612 (1) German Civil Code (BGB) remains to be seen, however, until the full grounds for the judgment are published; so far only a corresponding press release is available. The fact that the BAG referred the case back to the LAG for lack of sufficient information as to the extent of travel times actually required indicates that the BAG is in line with the LAG and bases its claim on Section 7 point 4.3 of the CBA, which applies to the employment relationship between the parties and contains a regulation on the remuneration for necessary travel times. Thus, the BAG’s ruling would not have set up a generally valid precedent on the reimbursement of travel times without a corresponding collective bargaining agreement or employment contract - contrary to numerous expectations and comments in the press. 

Rather, the existing case law would prevail according to which »work«, as a performance of the promised services within the meaning of Section 611 (1) BGB, is any activity that serves to satisfy the need of the employer. This includes business trips. The classification of travel time as »work« does not resolve the question whether it needs to be remunerated, though (BAG, judgment of 4.25.2018 – 5 AZR 424/17; BAG, judgment of 10.26.2016 – 5 AZR 226/16). This is because separate compensation rules for travel times can be agreed on, through an employment agreement or a collective bargaining agreement. If such an agreement does not exist, however, the general remuneration obligation according to Section 612 (1) BGB shall apply. In this case, it must be determined based on the individual circumstances of the respective case as to whether remuneration was to be expected for this travel time, whereby it is particularly important whether the travel activity is carried out during the regular contractual working time or outside it. Therefore, a generally valid regulation for the remuneration of travel times does not exist according to the previous precedent rulings. If alternative arrangements for travel times are made, the statutory minimum wage must nevertheless be borne in mind. The gross monthly remuneration must therefore reach at least an amount that is the total of the number of hours actually worked in that month (including travel time) multiplied by EUR 8.84 gross (BAG, judgment of 4.25.2018 – 5 AZR 424/17).

Whether this fact has actually changed as a result of the BAG judgment remains to be seen. We will get a clearer picture once the complete opinion is published by the BAG. Employers who have not agreed on individual or collective regulations on the reimbursement of travel times are therefore still recommended to agree on transparent remuneration rules, which in particular also regulate the remuneration of travel times.

Important note: The fact that travel time may have to remunerated does not necessarily mean that it is also working time, which must be taken into account with regard to the maximum working time limits and the observance of rest periods according to the Working Hours Act (ArbZG)! The ArbZG is aimed at the protection of the employee against excessive demands and has no immediate bearing with regard to compensation issues.

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