Employer Action Code: Act
The Federal Labor Court (Bundesarbeitsgericht – BAG) has ruled that existing German legislation, interpreted together with European Union (EU) law, requires employers to establish a system to record their employees’ daily working time. Though Germany-specific, the decision also raises questions for employers with operations in other EU member states.
- The EU Working Time Directive of 2003 sets out employees’ rights regarding working time limits, rest periods and leaves (among other things), but the directive does not address time recording requirements.
- The European Court of Justice (ECJ) ruled in 2019 that, to enable compliance with the directive, all 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.” Member states are in various places in terms of adopting conforming legislation.
- While the German Ministry of Labor had stated that it was working toward legislation to comply with the ECJ ruling, this was preempted to some degree by the BAG’s surprise ruling announced in September 2022 (details behind the decision were released on December 3) in which it concluded that provisions regarding the tracking of certain working time in the existing Occupational Health and Safety Act (Arbeitsschutzgesetz), taken together with the 2019 ECJ ruling, already establish a broad legal obligation for German companies to record the detailed working time of their employees. Further legislation may still be forthcoming to clarify important implementation issues.
The BAG ruling is clear on certain points based on current legislation, less so on others:
- The employer is responsible for establishing and managing a working time recording system. The system need not be electronic, may differ for different types of employment activities and may delegate time recording to employees.
- It’s not clear whether senior employees must be covered by the time recording system.
- Works Councils’ existing co-determination rights apply with respect to how the system is set up and managed.
Starting immediately, all employers are obliged to record their employees’ working time precisely. According to the BAG ruling, this refers to the beginning, duration and ending of working time. Though formal legislation is pending, employers should review and possibly adapt their time recording system. More broadly, employers across the EU are advised to review national standards for recording working time as they relate to the 2019 ECJ ruling in those EU states where they have operations and to evaluate the robustness of their time recording processes.