Working time: Full documentation required in future according to EJC ruling

ECJ ruling based on a Spanish case

The ECJ decision originated from a case brought before the Spanish National Court of Justice by a trade union seeking to impose an obligation on the employer Deutsche Bank, which only documented overtime, to fully record the daily working hours of its Spanish employees.

In the Spanish union's view, recording all working time was the only way to ensure compliance with mandated working hours since – according to its research – 53.7% of overtime hours worked in Spain to date have not been properly recorded.

The National Court of Justice in Spain referred the case to the ECJ.

Advocate-General opinion presages court decision

At the end of January, ECJ Advocate-General Giovanni Pitruzzella came out in favor of stricter timekeeping rules in a reasoned opinion that paved the way for the final ECJ ruling. In Pitruzzella's view, the Charter of Fundamental Rights of the European Union obliges companies to introduce a system for recording the actual daily working time of employees, and argued that national legislation not achieving this level of protection is contrary to EU law and therefore not applicable.

In their May decision, the Luxembourg judges of the ECJ supported this view.

Protection of fundamental rights under the EU Charter

As grounds for their ruling, the ECJ judges referred to the Charter of Fundamental Rights and the EU Working Time Directive 2003/88/EC, which guarantees "the fundamental right of every worker to a limitation of maximum working hours and to daily and weekly rest periods".

Without a system for recording working time, the justices ruled that it is not possible to check whether permissible working hours have been exceeded and the right listed above is being respected.

Ramifications: more bureaucracy and the end of trust-based working hours

Due to similarities between the legal situation in Spain and Germany, the ECJ decision will also have considerable ramifications on German labor law.

German lawmakers must now pass a law compelling employers to set up timekeeping systems that satisfy the court's requirements. German lawmakers, however, are free to decide on the details of this new system, such as the appropriate form to be used for recording daily working hours.

Also, the ruling acknowledges that there may be exceptions to this requirement. According to the ECJ, the size of the company or the nature of its work may justify flexibility in time-recording guidelines.

German lawmakers, nevertheless, must now initiate a suitable regulation, which requires employers “to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured”.

As a result, the current form of "trust-based working time" may not have a future since it is unclear whether the new German law will allow employees to document their own working time. In the policy paper World of Work 4.0, co-drafted by the German government and trade unions, taking the responsibility for time recording away from employees may be retrogressive. According to analysts, it is possible that the flexibility gained in the modern working world will suffer under such a system.

Under this system, employers will also have to cope with additional bureaucracy and compliance with all working time laws will become more relevant.

On the positive side, the ECJ ruling does not oblige employers to act immediately. In Germany, the ball is now in the court of lawmakers, but it remains to be seen how quickly they will take action and the exact requirements they will legislate.

For more information on this pivotal ruling and how it could affect your business operations in Germany, please contact one of the following local CMS experts.