German labour court decides: obligation to record working time

The Federal Labour Court (Bundesarbeitsgericht, BAG) ruled in its decision of 13.09.2022 that there is an obligation for companies to record working time. This decision will have far-reaching effects on the working world.

Legal obligation to record working time

The decision of the Federal Labour Court was actually only supposed to answer the question of whether the works council has a right of initiative to introduce electronic time recording. The Federal Labour Court denied this with reference to section 87 (1) Betriebsverfassungsgesetz (BetrVG), which states that co-determination (and thus also the right of initiative) is only permissible "insofar as a statutory (...) regulation does not exist". According to the court, such a statutory regulation is to be seen in section 3 (2) no. 1 Arbeitsschutzgesetz (ArbSchG). According to this, companies are obliged to take the necessary measures for occupational health and safety. This includes ensuring a suitable organisation and providing the necessary means. According to the court, this also includes the introduction of a time recording system.

Previous legal situation

The European Court of Justice decision of 15.05.2019 ordered the German legislator to introduce an obligation for companies to record working time in order to be able to objectively and reliably register the daily working time of employees. This requirement has not yet been implemented, so that companies only had to record overtime and Sunday work until the Federal Labour Court’s decision.

Effects of the decision

With this decision the Federal Labour Court is ahead of the German legislator. Companies must now set up a system with which working time can be recorded. This obligation is effective immediately. Therefore, it is no longer possible to wait for the legislator to implement a corresponding regulation.

The fact that the legislator has not yet made this corresponding regulation is unfortunate. After the Federal Labour Court's decision, action by the legislator is even more necessary, because the court has only decided that there is an obligation to record time, without providing further details. In what way time recording is to be structured and if the works council has a right of co-determination in this regard has not yet been clarified. As the detailed reasoning of the Federal Labour Court has not yet been published, it remains to be seen whether this will provide further details on time recording. Without publication of this reasoning and without concrete specifications by the legislator, further effects of this decision remain unclear for the time being.

However, it is clear that if a time recording system is already in place, the decision should not have any particular impact. If, on the other hand, a time recording system is not yet in place, further waiting is not recommended and such a system should be established promptly. It remains to be seen whether it is sufficient to have time recording carried out by the employees alone. In particular, the question will also arise in the future as to what extent the "trust-based working time" model in its current form will be affected by the resolution. The Federal Labour Court’s decision will also have an impact on working from home. According to the coalition agreement, flexible working time models must remain possible. It remains to be seen how exactly the legislator will regulate the detailed issues in this regard.

A right of participation of the works council is to be assumed. It is true that the works council, just as little as the company, may decide on the "whether" of the introduction of a time recording system, since this has now undoubtedly been declared an obligation of the company. However, a right of co-determination in the concrete design of the time recording system seems likely.

With its decision, the Federal Labour Court has further strengthened the rights of employees. It remains to be seen to what extent companies will have leeway with regard to the systems and modalities to be used. The reasons for the resolution and any action by the legislator are therefore eagerly awaited.