September 2022 Blog

Rules for businesses on recording employee working time

By Decision of 13 September 2022 – 1 ABR 22/21 –, the German Federal Labour Court [Bundesarbeitsgericht – BAG] found as follows: Pursuant to Sec. 3 Para. 2 No. 1 of the German Occupational Health and Safety Act [Arbeitsschutzgesetz – ArbSchG], employers are required to introduce a system enabling the working time of their employees to be recorded. As a result of this legal obligation, the works council cannot impose the introduction of a system for (electronic) working time recording with the help of the conciliation board [Einigungsstelle], as a related co-determination right under Sec. 87 of the German Works Constitution Act [Betriebsverfassungsgesetz – BetrVG] exists only if and to the extent the operational matter concerned is not yet governed by legislation.

That means that in every business – regardless of its size and regardless of whether a works council is appointed – working time in Germany in future must be systematically recorded by the employer. This applies not only to overtime or in the minimum wage area but also to every minute worked.

The BAG decision is based on the following legal reasoning:

  • The interpretation of Sec. 3 Para. 2 No. 1 ArbSchG in compliance with European law, it argues, already today requires employers to the record working time of employees. According to this provision, employers have to ensure a suitable organisation and make available the required resources to ensure occupational health and safety in the form of working time recording.
  • But because it is a legal requirement, the works council does not have a right of initiative and thus cannot introduce and enforce a system for recording working time in the conciliation board.

What does that mean in practice?

  • Trust-based working time performed without any working time being recorded at all no longer complies with legislation.
  • Where this is nonetheless allowed or if – as is common practice – working time is simply not recorded, employers will be in violation of the Occupational Safety Act.
  • A violation will not trigger any immediate consequences. In particular, this will not likely entail any reversal in the burden of proof in actions for work compensation based on the BAG’s principles developed on 4 May 2022 making a strict distinction between the protective function of (recording) working time and the work compensation function. Neither is there any risk of a fine directly defined in the Act as is the case with the most recent tightening of labour law provisions in the German Act on the Notification of Conditions Governing the Employment Relationship [Nachweisgesetz – NachwG].
  • However, there is a risk of indirect consequences: on the one hand, the competent supervisory authorities may order compliance and adopt an administrative order for this purpose. On the other, an individual employee may make claims, whether for performance (i.e. for introduction of a time recording system) or for damages if health problems arise as a result of his or her working hours not being recorded.

In practical terms, companies in the near term will have to look at establishing an objective working time recording system and work out its specific design and features, presumably also in consultation with their respective works councils. Consequently, the question of a right of initiative will be of no practical relevance – a reasonable employer will approach the works council on its own initiative and implement a working time recording system.

If the works council opposes this or wants to have its own ideas implemented, it will hardly be possible for an employer to “go it alone” and adopt a system unilaterally, but in the end will have no alternative but to work together the conciliation board to this end. Lastly, working time recording will result in far-reaching monitoring means relating to travel times and work performed from a mobile office.

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