German Federal Labor Court surprises with legal obligation for employers to record working hours

So far, the German legislator has not transposed such decision into national law. The German Working Hours Act (“ArbZG”) merely regulates that overtime as well as working hours rendered on Sundays and public holidays must be documented.

Now, the BAG has surprisingly rushed ahead and decided that employers are already required by law to record their employee’s daily working hours’ start, end and duration, i.e., to implement a system allowing the employees to record their working hours. The BAG bases such decision on a standard pursuant to the German Occupational Health and Safety Act (“ArbSchG”), more precisely upon Art. 3 (2) No. 1 ArbSchG. According to such standard, employers are obliged to provide an appropriate organization and the required equipment in order to comply with health and safety regulations.

On the BAG’s decision

In the aforementioned case, the parties are in dispute about the question whether the works council had a right to initiate the introduction of an electronic system for the recording of working hours.

All negotiations about a works agreement between the employers and the works council failed. The employers were opposed to the introduction of a time recording system. In the proceedings initiated by the works council to set up a conciliation board, the employers objected to the conciliation board’s competence. According to their opinion, the works council had not right of initiative. The works council, on the other hand, believes to have a comprehensive co-determination right pursuant to Art. 87 (1) No. 6 German Works Constitution Act (“BetrVG”).

In the first instance, the Labor Court dismissed the application, whereupon the Regional Labor Court upheld the works council’s appeal. With their appeal, the employers intended to have the Regional Labor Court’s decision revoked.

The appeal before the BAG was successful. According to the court, the works council had no right to initiate the introduction of a time recording system within the company, since an existing legal regulation blocked the works council’s co-determination in this regard. The obligation to introduce a time recording system was based upon the general provision pursuant to Art. 3 (2) No. 1 ArbSchG. The BAG refers to an interpretation of the ArbSchG in line with European law and thus on the ECJ’s “time-clock decision”. According to an interpretation in line with European law, such provision also included the employers’ general obligation to introduce a system allowing the recording of daily working hours performed by their employees which documents the start and end, and thus the duration of working hours including overtime.

Consequences for practice

Even if the BAG’s decision comes as a surprise, the requirements pursuant to the German Working Hours Act are not going to change for the time being. Besides their obligation to document overtime as well as work on Sundays and public holidays, however, employers are, with immediate effect, legally obliged to implement a system allowing for the recording and documentation of the working hours’ beginning, end and duration including overtime. Unless the legislator defines more specific rules, there is some leeway for employers in determining, among other things, such system’s form. In particular, working hours must not mandatorily be recorded in electronic form.

In accordance with EU law, it is also not excluded to delegate the recording of the respective working hours to the employees. However, when introducing a time recording system, it is to be taken into account that the improvement of the employees’ safety and health protection at work constitute objectives which must not be subordinated to merely economic considerations. It should also be noted that this does not automatically entail the end of trust-based working time. Rather, working hours must also be recorded within the scope of a trust-based working time system to the aforementioned extent. It remains to be seen what changes will be passed by the legislator in connection with documentation requirements. According to information from the German Ministry of Labor, a new regulation is to be expected in the first quarter of the new year.