Time clock for all - the end of the trust-based system of measuring working hours in Germany?

On 13 September 2022, Germany's highest labour court handed down a ruling that has far-reaching consequences. It states that every employer in Germany is legally required to record the working hours of all employees.

Until now, there has been no general obligation in Germany to record the hours worked by employees each day.
The only exceptions were for “mini-jobbers” or employees in certain industries, as well as for overtime and Sunday work. The trust-based system of working time was very popular.

A decision by the ECJ (European Court of Justice) caused some concern in 2019 when it ruled that the relevant EU Working Time Directive imposed exactly this type of obligation on all employers in Europe. However, the German legislature did not amend the German Working Time Act. According to the prevailing legal opinion, the existing German Working Time Act does not impose a general obligation (for all employers with respect to all employees) to record the daily working hours.

The Federal Labour Court has now decided otherwise, stating that under an interpretation of Section 3 (2) no. 1 of the German Occupational Health and Safety Act (in conformity with European Union law), each employer is legally obligated to record the working hours of every employee. German law already provides that employers must "ensure appropriate organisation and provide the necessary means" to protect the health of their employees. According to the judges, this also includes recording the hours worked. 

The new German government's deliberations on amending the Working Hours Act, which were already well advanced, have now been overtaken by the ruling of Germany's highest labour court and it can be assumed that this will also speed up the further legislative process. The coalition agreement of the current coalition stated:  "In dialogue with the social partners, we will examine the need for adjustments in light of the ECJ's case law on working time law. In this context, flexible working time models (e.g., a trust-based system of working time) must continue to be possible." The legislature must now focus on how to implement the measures needed to record working hours, not whether to do so.

The press release issued by the Federal Labour Court does not indicate whether the decision issued by judges at the highest court will provide answers to the question of how exactly the working hours must be recorded. Accordingly, there is great anticipation as to what reasoning the judges will provide in their decision. For the time being, it can be assumed that as a minimum, the start and end times of the daily working time must be recorded and, as a matter of precaution, also the duration. With regard to the format, there are still no specifications at the European level, meaning that employers are thus free to choose how they record the working hours. However, one can expect co-determination requests from the works councils when it comes to the question of whether a reference to § 87 para. 1 no. 6 of the German Works Constitution Act can be established by the method used (electronic?) to record the working times.

The ruling thus has an impact on all companies in Germany because the Occupational Health and Safety Act applies without exception, regardless of the size of the company. This obligation applies immediately; there is no grace period that would allow time for the implementation. It will therefore change the way working times are handled in Germany and may challenge trends such as teleworking and working from home.

Our experts in the Mazars German Employment & Labour Law team will be happy to answer any questions you may have regarding the implementation of this new obligation. You can find an overview of our central contact persons at our locations here.

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