ECJ: Obligation to introduce time recording systems – The end of the era of working time based on trust?

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In case C-55/18, on 14 May 2019 the European Court of Justice (ECJ) ruled in a eagerly awaited ruling that Member States must oblige employers to set up a system to measure the daily working time of employees. The ECJ makes it clear that the Member States have some leeway in implementing this: They can determine independently the concrete modalities for the implementation of a time recording system and thereby take into account the particularities of the respective field of activity or characteristics, even the size of certain enterprises.

This ruling quickly sparked a discussion in Germany. For some, it marks the end of working hours based on trust, a working time systems which rather focusses on the completion of certain tasks than on duration of attendance at the workplace. Others fear considerable, in particular bureaucratic problems for employers – so also German Federal Minister of Economics Peter Altmaier. In contrast, the trade unions welcome the ruling as a strengthening of employee protection against “flatrate work” and unpaid overtime. According to German Labour Minister Hubertus Heil, it is currently being examined whether the German legislature needs to take action.

Facts of the case:

The decision was based on the following facts: A Spanish trade union brought an action before the Spanish court, the Audiencia Nacional, for a declaration that Deutsche Bank must be obliged to implement a system for the complete recording of the daily working time of its employees. It argued that only such a system would make it possible to monitor compliance with the working time rules and the obligation under national legislation to provide trade union representatives with information on overtime worked each month. Similar to the legal situation in Germany, also in Spain there is no general obligation to record regular working hours, but only overtime worked. The Spanish court referred the case to the ECJ for a preliminary ruling.

The ECJ’s ruling:

In its decision, the ECJ followed the opinion of the plaintiff trade union and the opinion of the EU Advocate General and ruled: “In order to ensure the effectiveness of those rights provided for in the working time Directive and the Charter, the Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.” The ECJ further clarifies that without such a working time recording system, neither the number of hours actually worked by the employee nor their time situation nor the working time exceeding the regular working time as overtime can be determined objectively and reliably. It is only by means of such a recording system that the effective observance of the right conferred by Union law to limit maximum working hours and minimum rest periods can be fully guaranteed to employees. A working time recording system would facilitate both the proof by employees of non-observance of their rights and the monitoring by competent authorities and national courts of the effective observance of these rights.

Implications of the ruling:

rendered working time based on trust unfeasible. After all, it is quite conceivable that the ECJ’s requirements could be transposed into a working time system based on trust. It can be agreed with the employee that he may independently manage beginning and end of his daily working time, as long as the other requirements of the German Working Time Act (Arbeitszeitgesetz – ArbZG) are met and the employee records his working time in a time recording system set up by the employer. This increases the administrative burden on both sides, but ensures the implementation of the ECJ requirements. In particular, the introduction of modern instruments such as time recording apps could be considered. Especially in today’s digitized world, everyone demands more flexibility in working hours, wishes for home office options and switches to working hours based on trust. If the employer has a justified suspicion of violations of the German Working Time Act in the context of trust-based working hours, he must, however, intervene accordingly – as under the current legal situation.

Since the ruling of the ECJ must first be implemented in Germany, opportunities may also arise: For example, to bring our partially antiquated labour law in Germany up to speed and thereby adapt it to the needs of a modern working world.

Practical advice:

Until the ECJ ruling is implemented into German law, the current legal situation remains unchanged. In principle, companies in Germany only have to record working hours that exceed the working-day working time of generally 8 hours (Section 16 German Working Time Act). The documentation obligation does particularly not apply to beginning and end of daily working time – similar to the legal situation in Spain before the introduction of the regulation on the general obligation to record working time. There is therefore no direct obligation to document the entire working time. However, it must be borne in mind that the current legal situation already obliges the employer to ensure compliance with the limits of the German Working Time Act and to submit a record of the entire working time at the request of the works council in order to guarantee their monitoring tasks under the German Works Constitution Act (Betriebsverfassungsgesetz – BetrVG).

It is a question of time when the German legislator will react to the ECJ’s decision. Companies should therefore review their existing working models in the light of the requirements of the ECJ’s decision. This applies in particular to those industries in which beginning and end as well as the extent of working hours are typically not systematically recorded. At the latest when the legislator takes action in the sense of the ECJ ruling, companies should introduce appropriate time recording systems in good time in order to avoid fines in particular. The competent authorities can then investigate violations of the German Working Time Act more easily.

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