Landmark ruling on the time recording of employees: The German Federal Labor Court (Bundesarbeitsgericht - BAG) preempts the German legislature on the time recording of employees' working hours.

With its decision of September 13, 2022 (Case No. 1 ABR 22/21), the BAG has set a sensational precedent. As a result, the obligation imposed by the ECJ on all employers to systematically record the working hours of their employees already applies. This is likely to have extensive implications for future practice. 

The case and the decision

The court in Erfurt had to rule on a case which in itself concerned the works council's (German Betriebsrat) right of initiative to introduce an electronic time recording system. According to the court, however, a corresponding right of co-determination pursuant to § 87 of the Works Council Constitution Act (Betriebsverfassungsgesetz - BetrVG) only exists if and to the extent that the operational (in-house) matter is not already regulated by law.

It is true that § 16 of the Working Time Act (Arbeitszeitgesetz – ArbZG) only provides for the obligation to document overtime. However, the BAG - surprisingly - referred to § 3 (2) No. 1 of the German Occupational Health and Safety Act (Arbeitsschutzgesetz - ArbSchG). It stipulates that the employer is obligated to take the necessary measures for occupational health and safety, bearing in mind the circumstances that have an impact on the safety and health of the employees at work. This also includes ensuring that the employee does not work excessive overtime. Thus, in the opinion of the BAG, there is already an obligation on the part of the employer to introduce a system with which the working time worked by employees can be recorded. Due to this legal obligation derived by the BAG from § 3 (2) no. 1 ArbSchG, there is no possibility for the works council to impose the introduction of a system for recording working hours.

Practical Relevance

The significance of the reasoning used by the BAG concerning § 3 ArbSchG, however, goes far beyond the decision in the individual case and makes it a decisive landmark ruling. Thus, the BAG revives the debate on the amendment of the German Working Time Act (Arbeitszeitgesetz). The Working Time Act applies to all companies in Germany, regardless of whether or not there is a works council. According to the BAG, this means that all companies, regardless of size, will be required to record working hours in the future. The background to this is the so-called punch clock ruling ("Stechuhr-Urteil", ruling of May 14, 2019, Ref. C-55/18) of the European Court of Justice (ECJ), according to which employers must be obliged by the respective member states to introduce an "objective, reliable and accessible system" for recording the daily working hours of their employees. The German legislator has not yet complied with this requirement.

The BAG has now ruled on the question of whether and that a system for recording working time is obligatory. However, the question of precisely how working time is to be recorded in the future remains open. The BAG's press release and the ECJ's ruling do not provide any clear guidelines. The publication of the grounds for the ruling can therefore be expected with considerable interest, even if the BAG's grounds for the ruling are not expected to lead to a uniform solution for all. In addition, the changes that have taken place in the working world in the meantime with home office, flexi-time and trust-based working time models must be taken into account. In any case, the legislator is now also likely to be forced to act quickly and put the legislative process at the top of the political agenda.

Following the BAG's decision, employers should at this stage at least check whether their time recording system at least complies with the current legal requirements. In addition, you could already consider which time recording system might make sense and be feasible for your own company in the future.

We will of course keep you informed about further developments and will be happy to advise you on the introduction and implementation of working time recording systems.

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