Germany: Time recording at work - works council's right of initiative?

On 14 May 2019, the Court of Justice of the European Union (CJEU) ruled in the CCOO case (Case No. C-55/18) that the recording of working time in the Member States of the European Union must be carried out through an "objective, reliable and accessible system". The member states are now required to transpose the European Working Time Directive into national law accordingly to the extent that this has not yet been done.

The German Working Time Act does not yet provide for an obligation to record working time on a daily basis and, according to the prevailing opinion, therefore requires an amendment to the law in order to implement the Directive. However, while the legislature has not yet made any changes to the Working Time Act, the CJEU's decision is nevertheless already concerning the German Labour courts in some cases. Thus, the decision of the CJEU gains relevance even before its implementation into German law and gives companies reason to consider the introduction of a time recording system even before the implementation into national law. Under certain circumstances, these considerations could now soon be accelerated by the works council. That is because, according to a recent decision by the Labour Court of appeal of Hamm (LAG Hamm), the works council is entitled to a right of initiative for the introduction of a corresponding time recording system (LAG Hamm, 27.07.2021 - Az. 7 TaBV 79/20).

Emden Labour Court: Easement of the burden of proof in overtime proceedings

The Labour Court of Emden was the first German court to deal with the CJEU ruling (ArbG Emden, 20.02.2020 - 2 Ca 94/19). The Emden Labour Court assumes a direct application of the requirements of the CJEU case law on the recording of working time for employers, as it has now repeatedly decided in further decisions (also ArbG Emden, 24.09.2020 - 2 Ca 144/20).

The proceedings in each case concerned the remuneration of overtime. Here, the employee bears the burden of proof that the overtime was ordered, approved, tolerated or otherwise necessary by the employer and was actually performed by the employee. In the opinion of the Emden Labour Court, however, the absence of a system for recording working time in the case of trust-based working time leads to an easement of the burden of proof for employees in overtime proceedings. In contrast to the Federal Labour Court's (BAG) previous decision, the Emden Labour Court ruled on 24. September 2020 in this respect that the "positive knowledge" as a prerequisite for the toleration of overtime no longer has to be proven by the employee. This applies in any case if the employer could have obtained knowledge by inspecting the recording of working hours, which he is obliged to introduce and monitor as a result of the CJEU judgment. In the further proceedings of 20 February, 2020, the employer could not, in the opinion of the Emden Labour Court, substantively counter the employee's submissions, as the submitted records of working hours on the part of the employer did not originate from an objective, reliable and accessible system that was mandatory to be established as a result of the CJEU judgment.

The Labour Court of appeal of Lower Saxony (LAG Niedersachsen) overturned a third decision of the Labour Court of Emden (ArbG Emden, 09.11.2020 - 2 Ca 399/18) with regard to the reversal of the burden of proof and ruled that the CJEU’s decision does not affect the burden of proof in overtime proceedings (LAG Niedersachsen, 06.05.2021 - 5 Sa 1292/20). According to the court, a deviation from the principles established by the BAG on the burden of presentation and proof in overtime proceedings was not appropriate and was also not undertaken by the BAG itself in the wake of the CJEU’s decision. However, the appeal against the decision is pending before the BAG (under case no. 5 AZR 359/21).

In this respect, the BAG's decision could be “groundbreaking” for the distribution of evidence and arguments in future overtime proceedings. Against this background, companies are well advised to keep a close eye on developments relating to the recording of working time and to consider introducing the system even before the implementation of the Directive into national law.

Can the works council demand the introduction of the time recording system?

Companies may soon even be requested by their works council to introduce such a system. According to previous case law of the BAG, the works council has a right of co-determination under Section 87 (1) No. 6 of the German Works Council Constitution Act (BetrVG), but no right of initiative with regard to the introduction and use of technical equipment designed to monitor the behaviour or performance of employees.

In its decision dated 27 July 2021 (Case No. 7 TaBV 79/20), the LAG Hamm ruled that the works council has a right of initiative to introduce an electronic time recording system pursuant to Sec. 87 (1) No. 6 BetrVG. The Labour Court of Minden of the first instance, however, had still followed the ruling of the BAG from 1989, in which it had been determined that the right of co-determination did not include a right of initiative regarding the introduction of a technical control device, since this was merely a pure right of defence of the works council (ArbG Minden, 15.09.2020 – 2 BV 8/20; BAG, 28.11.1989 - 1 ABR 97/88).

The LAG Hamm now took a fundamentally different view. The rejection of a corresponding right of initiative was neither compatible with the will of the legislator nor with the wording of the law. Questions of European law, in particular the CCOO judgment of the CJEU, were therefore not relevant to the decision.

The decision of the LAG Hamm is not yet legally binding. The BAG will now have to decide whether it will deviate from its previous decision from 1989. If it confirms the decision, this may have far-reaching consequences for practice. If the BAG follows the reasoning of the LAG Hamm, employers could henceforth not only be exposed to initiatives of the works council with regard to electronic time recording, but also, if applicable, to other technical devices which are suitable for monitoring the conduct or performance of employees and which are considered expedient by the works council.

Conclusion

The CJEU judgment on the recording of working time from 2019 has not lost relevance. What concrete effects the requirements at the European level will have for employers at the national level remains highly controversial - as the decisions presented make clear. The recent decisions further emphasize, that the introduction of a time recording system in line with CJEU case law should be urgently considered even before the transformation into national law. However, the decisions of the German Federal Labour Court and the implementation of the directive into national law remain to be seen with interest.