Germany: Legal Obligation for Employers to Establish System for Working Time Recording

One of the most relevant Federal Labor Court rulings in the year 2022 was derived from a rather unspectacular case: After an employer broke off negotiations with a works council over a works agreement on electronic time recording, the works council wanted to set up a reconciliation committee for this matter. The employer objected to the conciliation committee’s competence. It argued that the works council had no right of initiative regarding the introduction of electronic time recording.

Therefore, the works council applied for a court ruling that a right of initiative regarding the introduction of electronic time recording existed. The employer argued that the decision “if” a technical instrument is introduced is on him without any works council co-determination. Only when such a decision has been taken by the employer, the works council has a right of co-determination regarding the “how” of electronic working time recording to protect the employees’ personal rights.

The Federal Labor Court ruled that there is indeed no right of initiative of the works council with regard to the introduction of electronic time recording, i.e. the works council cannot force the employer to introduce such a system. However, the reasoning of the court behind this ruling caused quite a stir: the court argued  that there is already a legal obligation for the employer to introduce a time recording system. This legal obligation arises from the Working Hours Act which has to be interpreted in accordance with European law. Wherever such legal obligation from statutory law exists, there is no room for a right of initiative of the works council.

The reasoning of the court comes unexpectedly as the Working Hours Act only stipulates an obligation to record overtime beyond 8 working hours per day. A change in the law has been expected ever since the decision of the European Court of Justice (C 55/18) on working time recording but has not yet been implemented. The Federal Labor Court has now gone ahead and identified a legal basis in the already existing law for an obligation of the employer to introduce a working time recording system. Currently, only the press release of the court ruling is available. It remains to be seen if and to what extent the reasons will provide guidelines for employers with regard to working time recording.

“Practical Point”

• This court ruling is one of the most practically relevant rulings this year.
• It is now clear that employers are legally obligated to record working time. In the event of non-compliance, this can have far-reaching consequences, in particular regarding the compensation for overtime.
• Employers now have to review their working time models, in particular as to whether previous trust-based working time models should be replaced by time recording and more control.
• Until the full decision of the Federal Labor Court is published, it remains to be seen to what extent the Federal Labor Court has defined specific requirements for the recording of working time.