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Germany: European Court of Justice ruled that employers in the European Union must implement a system to record the daily working time of their employees

A Spanish trade union sued the Spanish subsidiary of Deutsche Bank in front of the Spanish national labour courts, in order to obligate the bank to set up a system for recording the time worked each day, by each employee. The union argued that such a system was necessary in order to ensure the bank was complying with labour laws, in particular regarding the maximum permissible working time. Deutsche Bank argued that Spanish law does not require employers to set up such a system recording the working time. In this regard, the German legal situation is similar. German law currently only requires recording overtime worked by employees, but not the normal working hours. Many German companies, therefore, use flexible working time models, where the employees determine the concrete number of hours worked on each day independently within the maximum permissible working time under statutory law.

The Spanish case went up to the European Court of Justice, which ruled on May 14, 2019 that the EU 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. The implementation of such a system and particularly the determination of what form it must take is up to the Member States. Therefore, there is still a high level of uncertainty regarding the concrete changes that this ruling will have for employers in each Member State, including Germany.

What is certain from a German perspective is that each company will have to implement some kind of system for recording the working time of all employees, subject to the German Working Time Act. This applies to all employees except executive employees in terms of the law. We expect that fully delegating the obligation to record the working time to the employees will no longer be permissible, as this would not constitute an objective and reliable system in terms of the Court ruling. We also expect that the working time model practiced in some German companies, where the working hours are fully based on trust and not recorded, will not be permissible any more in the present form. It will remain possible to allow employees to independently determine their working time, but this working time has to be recorded at the same time. If the employer notes violations of the Working Time Act through these records, he will have to intervene in order to not risk a fine. Pursuant to the European Court of Justice, recording the working time shall make it easier for employees to assert a claim to overtime pay. However, from the German perspective, the burden of proof in a court proceeding regarding the fact that the overtime was ordered by the employer, will still be on the employee. Furthermore, German case law stating that employees with a base salary significantly above the average cannot claim overtime payment still stands. Nonetheless, we expect that the ruling of the European Court of Justice will have a significant impact on the daily working life in many German companies.