According to prevailing opinion in legal practice, employers were only required to keep records of working hours with regard to overtime and working on Sundays, asset out in Section 16 (2) of the Working Time Act (Arbeitszeitgesetz – ArbZG).
In its decision of 13 September 2022 (ref. 1 ABR 22/21), the Federal Labour Court (Bundesarbeitsgericht – BAG) has now taken a fundamentally different view. The Court has determined that there is a legal obligation to record all working hours, based on Section 3 (2) No. 1 of the Occupational Health and Safety Act (Arbeitsschutzgesetz), according to which the employer must ensure suitable arrangements to guarantee the safety and health protection of workers. The BAG justifies this somewhat surprising finding with an "interpretation in conformity with Union law" of that provision.
The background to this case is the so-called "time clock ruling" of the European Court of Justice (ECJ) of 14 May 2019 (case no. C 55/18), according to which employers are obliged by their respective legislator to introduce an objective, reliable and accessible system with which the daily working time worked by each employee can be measured. According to the ECJ, the EU Working Time Directive (Directive 2003/88/EC) is of particular importance for the protection of workers health and safety and so must be interpreted strictly. Member States must not only implement the provisions of the Directive, but must also fully guarantee the practical effectiveness of the rights under the Working Time Directive. Without a record of working time, neither the duration of working time nor its beginning and end could be reliably determined. With regard to the implementation and set-up of how to record working time, the ECJ had left Member States some leeway as to the form in which time recording can take place, and allowed for the possibility of providing for different rules and requirements depending on the sector, size and peculiarities of the company. The German legislator has not yet reflected this in domestic legislation.
Content and significance of the decision
In the case decided by the BAG, negotiations with the works council seeking agreement on the electronic recording of working hours had failed. As a result, the employer decided to completely forego the introduction of time recording. In response to this, the works council initiated conciliation proceedings, setting up a conciliation body and arguing that it had a “right of initiative” regarding the introduction of an electronic working time recording system pursuant to Section 87 (1) No. 6 of the German Works Constitution Act (BetrVG). According to the press release published by the court in this case, the BAG has overturned that decision and held that in the present case there is no scope for such a right of initiative on the part of the works council. The reasoning takes a completely new approach compared to previous decisions: According to Section 87 (1) BetrVG, the works council only has a right of co-determination if and to the extent that there is no statutory or collectively agreed regulation. Such a statutory regulation exists in the present case with regard to the electronic recording of working hours. According to Section 3 (2) No. 1 of the German Occupational Health and Safety Act, an employer is already legally obliged to have a system in place to record the working hours of employees.
The new decision has raised widespread interest in the press and among legal commentators. Reference has been made of a “thunderbolt” that is now putting employers and legislators under considerable pressure to act. In our view, caution is called for here. First of all, this is only a press release, which only hints at the essential legal issues or leaves them unaddressed. In particular, the press release does not address the fact that the “time clock ruling” of the ECJ gives Member States leeway as to the form in which time recording can take place and allows for the provision of different regulations. There is also no indication as to whether time recording can be delegated to employees – as has been the case to date under Section 16 of the ArbZG.
Essential elements of the legal obligations arising from the decision of the BAG remain unknown, at least not from the information made public to date.
For the time being, we recommend waiting until the BAG publishes the full text of the decision and, if necessary, the legislator issues clarifications on the implementation of the European legal requirements. Apart from in relation to some regulated sectors, such as temporary employment, there is no threat of sanctions or fines if employers take no action for the time being due to the currently unclear legal situation.