A new decision by the Federal Labor Court (BAG) includes an important change in the law. On Sept. 13, Germany's highest labor court decided that employers—regardless of the size of the company and the existence of a works council—must record the work hours of their employees (Ref.: 1 ABR 22/21). Here is a summary of the consequences of the decision for employers.
Overview of the Recent Changes
Until Sept. 13, German law provided only for an obligation to record work time for any work time exceeding the standard work time of eight hours on workdays and work time on Sundays and public holidays in accordance with Section 16 para. 2 of the Working Time Act (ArbZG).
The European Court of Justice (ECJ) ruled that member states have an obligation to implement a regulation that employers have to introduce an objective, reliable and accessible work time recording system in order to ensure the practical effectiveness of the European Union (EU) Working Time Directive. However, the German legislator has not implemented this decision yet.
The Federal Labor Court has now pre-empted any decision by the legislator by affirming a general obligation for employers to record the work hours of their employees.
From now on, employers are obliged under Section 3 para. 2 No. 1 of the ArbSchG to introduce a suitable—electronic—system for recording work time. There are no precise requirements for the system to be implemented yet, but according to the ECJ, it must be an "objective, reliable and accessible" system that is intended to ensure the practical effectiveness of the Working Time Directive. The system must, therefore, at least enable verification of compliance with rest breaks and rest periods. Verification requires the recording of the beginning and end of work time, including overtime, and rest breaks.
The mere provision of a work time recording system by the employer is not sufficient. The employer must ensure the actual participation of the employees in order to meet the control obligation according to Section 3 para. 1 ArbSchG.
Flexible work time models such as trust-based work time should continue to be possible in the future. This was already provided for in the coalition agreement, irrespective of the decision on Sept. 13. Employees who perform their work within the framework of trust-based work time may therefore continue to organize their work time independently in compliance with the applicable laws. However, they are now required to record the times they worked.
Outlook
Employees and the works council are now likely to have a claim against the employer for the introduction of a work time recording system, which they can enforce in court. However, the decision will not change the fundamental burden of presentation and proof in overtime compensation proceedings. As the BAG already stated in May 2022, the provisions of EU law on work time have no effect on the principles developed under German substantive law and procedural law on the allocation of the burden of presentation and proof in overtime compensation proceedings. Nevertheless, due to the obligation to record work time, disputes about the hours worked by the employee could now occur less frequently.
It is currently unclear how the competent authorities will react to the BAG's decision. In any case, without a change in the national regulations, sanctions by the authorities are unlikely at this point. There is no specific legal obligation to record all work hours, meaning that there is currently no regulation that imposes a fine. An analogous application of existing regulations would violate the statutory requirement under Article 103 para. 2 of the German Constitution.
Christian Koops and Miriam Siemen are attorneys with Baker McKenzie in Munich, Germany. © 2022 Baker McKenzie. All rights reserved. Reposted with permission of Lexology.
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