Federal Labour Court – Obligation to record working hours – What needs to be done?

In the following, we would like to inform you about the significance of the much-discussed ruling by the Federal Labour Court (BAG). It should be noted, however, that the precise details of time recording, as well as the specific rights and obligations associated with it, remain subject to legislative implementation. The Federal Ministry of Labour and Social Affairs has indicated that it intends to put forward a “practical proposal” for the structure of working time recording under the Working Time Act “expected in the first quarter of 2023”.

 

1. What did the Federal Labour Court (BAG) rule in its decision of 13 September 2022 (Ref. 1 ABR 22/21)?

The Federal Labour Court ruled in proceedings between a works council and an employer concerning the works council’s asserted right of initiative to negotiate a works agreement on the introduction of electronic working time recording. In this context, it made statements regarding the recording of working time. According to these, the total working time of employees must be recorded. Under Section 3(2)(1) of the Occupational Safety and Health Act (ArbSchG), the employer is obliged to introduce a system by which the working time performed by employees can be recorded. The court rejected the works council’s right of initiative – the actual subject of the decision – in the form asserted in this case.

 

2. What was already required by law?

Under the current legal framework, pursuant to Section 16(2) of the Working Hours Act (ArbZG), the employer is only obliged to record working hours on working days that exceed the maximum permissible daily working hours, as well as the total working hours on Sundays and public holidays; in other words, not the standard working hours. However, the European Court of Justice (ECJ) had already pointed out in a 2019 judgement that this is insufficient and that all working hours must be recorded. The Federal Labour Court (BAG) reiterates these principles in its decision in the context of the obligations it considers to be established under Section 3(1)(2) of the Working Hours Act (ArbSchG).

 

3. When does the obligation to record working hours come into effect?

The obligation to record working hours stems from an existing statutory provision and therefore already applies today.

 

4. How should working hours be recorded?

The legislature has not yet laid down any specific requirements regarding the form and content of working time records. However, in order to effectively ensure compliance with maximum working hours and daily and weekly rest periods, the employer must ensure that the start, end and duration of employees’ daily working hours, as well as their breaks, are recorded. As regards recording, the Federal Office of Public Health (BAG) points out that, in the absence of any statutory provision, employers have considerable discretion in this matter. This can therefore be done using electronic tools, in Excel spreadsheets or even by hand.

 

5. Can the employer delegate time recording to employees?

The employer may delegate the recording of working hours as before, whilst remaining responsible for compliance with the public-law requirements of occupational health and safety. They must therefore check – where necessary by means of spot checks – whether employees are complying with these requirements.

 

6. Does the obligation to record working hours apply to all employees?

The Federal Labour Court’s (BAG) ruling does not clearly state whether the obligation to record working hours also applies to senior executives. In the absence of a statutory exemption in the Occupational Safety and Health Act (ArbSchG), it is currently assumed that the obligation must also be observed by ‘senior executives’. However, within the scope of the discretionary powers, the Federal Labour Court (BAG) also points to the possibility of deviating from this requirement in certain areas. This may concern so-called ‘senior staff’, although it would be necessary to define who is to be classified as a ‘senior staff member’.

 

7. What rights does the works council have?

As things stand today, whilst the legislature has not yet laid down specific provisions regarding the recording of working hours, the employer is obliged to introduce a system for recording working hours; this then triggers the works council’s right of co-determination, as this is a provision relating to health and safety (Section 87(1)(7) of the Works Constitution Act (BetrVG)). If the employer opts for an electronic time-recording system, the works council must be involved in the design of the technical setup (Section 87(1)(6) of the Works Constitution Act (BetrVG)). The arrangements are then set out in a works agreement, which, in the event of a failure to reach agreement, may be determined by the conciliation committee.

 

8. What applies in a workplace without a works council?

At present, there is no ‘legal lever’ that employees can use to ‘force’ or ‘help shape’ the introduction and organisation of such a system. Nor does the employer have a collective bargaining partner, meaning they can introduce such a scheme ‘independently’.

 

9. Is trust-based working time still possible?

Yes. ‘Trust-based working hours’ generally refers to a flexible working time model in which employees can decide for themselves on the timing (i.e. start and end times) of their contractually agreed working hours. Documenting working hours does not stand in the way of such an arrangement. The provisions of public-law working time protection (in particular regarding maximum daily working hours and rest periods), on the other hand, serve to ensure the safety and health protection of employees and must also be complied with under trust-based working hours. Trust-based working hours, provided these provisions are observed, therefore remain possible. However, it is necessary here for employees to also record periods when they are not working.

 

10. What are the potential consequences of failing to record working hours?

At present, there are no immediate sanctions – such as the imposition of fines or penalties – for breaches of the requirement to record all working hours. This would require specific statutory provisions. Consequently, failure to introduce a time-recording system currently carries no sanctions in this regard.

 

11. How should companies proceed at this stage?

Until the legislator sets out the specifics of time recording, there is no need to act hastily. However, companies should take proactive steps in anticipation of forthcoming legislation, although this process may take some time. For example, unless this is already standard practice, they should look into the issue of working time recording. They should analyse how rest periods, breaks and maximum working hours, as well as prohibitions on working on Sundays and public holidays, are implemented within the company, including what should apply with regard to working hours when working from home or whilst on the move for ‘senior staff’.

 

Please do not hesitate to contact us should you have any questions relating to this complex issue. We are happy to assist you in addressing any legal queries arising from the Federal Labour Court’s ruling and to support you in implementing the necessary measures.

 

Your kallan Employment Law Team