DUTY TO RECORD WORKING HOURS – FEDERAL LABOR COURT PUBLISHES REASONS FOR DECISION
The Federal Labor Court (Bundesarbeitsgericht – BAG) has published the reasons for its decision of 12 September 2022 (1 ABR 22/21) regarding the obligation of employers to record working hours. Not all details have yet been clarified regarding the employer’s obligation to record the working hours of its employees, which is effective immediately. It remains to be seen whether the legislature will actually pass regulations as planned by the Federal Ministry of Labor.
I. BAG decision of 12 September 2022
In its decision (1 ABR 22/21), the BAG had to decide on the question of whether the works council had a right of initiative to introduce an electronic system for recording working hours, i.e. on the question of “whether” such a system should be introduced in the employer’s company. The BAG denied such a right of initiative of the works council. This decision only appears at first glance to be a success for the employer, because the BAG denied the works council’s right of initiative because it assumes that there is already a legal obligation for all employers – even those without a works council – to introduce an objective, reliable and accessible system for recording employees’ working hours. The BAG identified the legal basis for this obligation of the employer in § 3 para. 2 no. 1 German Act on the Implementation of Measures of Occupational Safety and Health to Encourage Improvements in the Safety and Health Protection of Workers at Work (Arbeitsschutzgesetz – ArbSchG) by way of an interpretation in conformity with EU law.
II. Concrete effects of the BAG decision
1. What has to be recorded?
Beginning and end of working hours as well as beginning and end of breaks, whereby it is not clear from the decision whether a standard deduction is also permissible for breaks.
2. When does the recording obligation apply?
The obligation is effective immediately.
3. What sanctions are imposed in the event of non-implementation?
Currently, violations of the obligation to record working hours are not administrative offenses, so no fine is forfeited until an explicit order is issued by the competent authority.
4. How should working hours be recorded?
The recording must be objective, reliable and accessible. However, the BAG has not specified any requirements for a concrete system. Therefore, records kept electronically or manually are conceivable as long as they meet the above requirements for the system. It is possible to delegate the recording of working hours to the employees.
5. Are there still rights of the works council in connection with the recording obligation?
The works council has a right of co-determination in the introduction of a system for recording working hours only with regard to the “how”, but not the “whether”.
6. Consequences for the practice
The decision of the BAG has far-reaching effects in practice. Even if flexible handling of working hours continues to be possible, the so-called trust-based working hours model is no longer permissible without recording and documenting actual working hours. Employers must therefore not only offer a system for recording working hours, but also monitor and ensure that this system is actually used. Employers should therefore oblige their employees in a verifiable form to use the systems for recording working hours and also monitor this use.
In addition to the specific effects in the area of recording working hours, it has not yet been clarified to what extent the obligation to record working hours will have indirect consequences for other areas of labor law disputes. This may affect the question of proof and responsibility for non-compliance with the Working Hours Act (Arbeitszeitgesetz) as well as questions regarding the burden of presentation and proof in overtime litigation, in which the BAG most recently still adhered to the familiar two-stage model.
III. Whether and, if so, how does the legislature respond?
For the time being, it remains to be seen whether the legislator itself will react to the obligation to record working hours by the BAG and create regulations on the scope (for example, non-application or application to executive employees, non-application to small companies) or concretization of the obligation to record working hours (for example, permission or prohibition of delegation to employees, definition of certain system requirements, handling of the recording of breaks). The Federal Ministry of Labor has announced that it will present a draft law in the first quarter of 2023. However, it remains to be seen whether this will actually lead to an act.
In its decision, the BAG stipulated the obligation of all employers to record the working hours of employees.
The obligation applies with immediate effect and requires all employers – even if there is no immediate threat of sanctions – to introduce and operate a suitable system for recording working hours.
In the concrete design of the system for recording working hours, the employer benefits from a wide margin of discretion, but must set up a system that enables the recording of working hours in an objective, reliable and accessible manner. The employer will have to check compliance with these requirements on a regular basis, as well as the correct use of the system by its employees in the case of delegation of the recording obligation.
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