On 14 May 2019, the European Court of Justice ruled that in order to ensure the effectiveness of the rights provided for in the Working Time Directive and the Charter of Fundamental Rights of the European Union (the ‘Charter’), Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.
Member States are responsible for establishing specific arrangements for implementing such a system, in particular the form that it must take, taking into consideration the particular characteristics of each sector of activity concerned, or the specific characteristics of certain employers (including, inter alia, their size).
Background
The Spanish trade union CCOO (supported by four other trade union organisations) brought a group action before the Spanish National High Court against Deutsche Bank SAE, seeking a declaration that the bank was under an obligation to set up a system to record the actual number of hours worked each day by its employees provided the system would make it possible to check that stipulated working times were adhered to and that it complied with the obligation to inform union representatives regarding monthly overtime worked, in accordance with Spanish legislation. The trade unions take the view that the obligation to introduce this type of system derives not only from national law but also from the Charter and Working Time Directive (2003/88).
Deutsche Bank argued that it is clear from Spanish Supreme Court of Justice judgments that no such general obligation exists under Spanish law. Deutsche Bank alleged that the Spanish Supreme Court found in previous case that there was no general obligation to record normal hours worked, stating that Spanish law merely imposes an obligation to keep a record of overtime worked and to communicate the number of hours overtime worked by employees, if any, at the end of every month to their union representatives. Before 12 May 2019, Spanish employers were not obliged to record their employees’ daily working time, provided that the statutory recording time obligation was limited to an overtime registry.
The Supreme Court observed that keeping a record of normal hours worked would entail a risk of unjustified interference on the part of employers in the private lives of workers and that, when the Spanish legislature decided to impose the requirement for such a record to be kept, it did so in specific cases, such as part-time employees, mobile employees, employees in the merchant navy and rail transport workers.
The Spanish National High Court of Justice was uncertain whether Spanish law, as interpreted by the Spanish Supreme Court, is consistent with EU law, so referred the matter to the European Court of Justice for a preliminary ruling. The National High Court considered that the interpretation of the Spanish Supreme Court of Justice would in practice deprive employees of an essential means of proving that the hours they have worked are in excess of ordinary working time and their representatives would not be able to check whether the rules have been complied with. In this situation national law would be incapable of ensuring effective compliance with the obligations laid down by the Working Time Directive and Occupational Safety and Health Directive (89/391, the ‘OSH Directive’).
In his Opinion of 31 January 2019 (which is a non-binding and independent proposal to the Court), Advocate General Pitruzzella suggested that the Court rule that the Charter and the Working Time Directive impose an obligation on undertakings to set up a system for recording the actual number of hours worked each day for full-time employees who have not expressly agreed, individually or collectively, to work overtime (and who are not mobile employees, individuals working in the merchant navy or railway transport employees) and precludes national provisions which do not impose such an obligation. He also stated that EU Member States are nonetheless free to determine what method of recording the number of hours actually worked each day is best suited for ensuring the effectiveness of EU law.
Analysis of the European Union Court of Justice judgement
On 14 May 2019, the Court declared that the Working Time Directive and the OHS Directive, read in the light of the Charter, preclude a national law that (according to the interpretation given to it in national case-law) does not require employers to set up a system enabling the duration of time worked each day by each worker to be measured.
The Court emphasised the following points.
Rest periods and limit on working hours
The Court stressed the importance of the fundamental right of every employee to a limitation on the maximum number of working hours and to daily and weekly rest periods, which is enshrined in the Charter and given specific detail in the Working Time Directive.
Protection for employee as weaker party
Member States are required to ensure that employees actually benefit from the rights conferred on them, without the specific arrangements chosen to implement the directive being liable to render those rights meaningless. The Court recalls that the employee must be regarded as the weaker party in the employment relationship, meaning that it is essential to prevent the employer from being in a position to impose a restriction of rights on him or her.
Need for an objective and reliable recording system
In the absence of a system measuring the duration of time worked each day by each worker, it is not possible to determine, objectively and reliably, either the number of hours worked and when that work was done, or the number of hours of overtime worked. This makes it excessively difficult, if not impossible in practice, for employees to ensure that their rights are complied with.
Complying with maximum working time and rest periods
The objective and reliable determination of the number of hours worked each day and each week is essential in order to establish whether the maximum weekly working time (including overtime) and minimum daily and weekly rest periods have been complied with.
National law must guarantee rights in Charter and Working Time Directive
A national law that does not include an obligation to use a mechanism providing that determination does not guarantee the rights conferred by the Charter and the Working Time Directive since it deprives employers and employees of the possibility of verifying whether those rights are complied with. Such a law could also compromise the Directive’s objective of ensuring better protection of the safety and health of workers. This is the case irrespective of the maximum weekly working time laid down in national law.
Time recording system best method of ensuring objective and reliable data
By contrast, a system enabling the time worked by workers each day to be measured offers those workers a particularly effective means of easily accessing objective and reliable data on the duration of time actually worked. This both helps those workers to prove any breach of their rights and the competent authorities and national courts to verify the actual observance of those rights.
Consequently and to ensure the effectiveness of the rights provided for in the Working Time Directive and the Charter, the Court considered that:
Impact on EU countries: general overview on recording obligations of daily working time
EU countries have differing regulations on recording working time performed by employees on a daily basis.
After analysing the recording of daily working time in different EU countries, we found some exceptions based on Article 17 paragraph 1 of the Working Time Directive to the daily recording principle. These include exemptions for managerial employees with decisive managerial functions such as in Austria and Italy where an employer is required to record employees’ working hours (especially the beginning and the end of working time and rest periods). Italy has implemented the Working Time Directive adopting exactly the same language as the Directive. So:
‘On account of the specific characteristics of the activity concerned, the duration of the working time is not measured and/or predetermined by the workers themselves, and particularly in the case of:
Italian employers have a duty to fill in the so-called Libro Unico del Lavoro (LUL) in which information regarding the employment relationship (including the presence or absence of each employee and working hours) is recorded. The LUL is the result, as a matter of fact, of daily records.
In Belgium the obligation to establish a recording system only applies to certain sectors (i.e. financial and banking sector) or certain groups (i.e. part-time employees working outside their regular working hours) or employees working with ‘floating’ working schedules with fixed periods during which the employee must be present (‘main period’) and variable periods during which the employees chooses the beginning and end of the working day as well as the breaks (the ‘floating’ period).
In France, employers’ obligations to monitor working time vary according to the type of employees: a distinction is made between employees whose working time is calculated in hours (weekly, monthly or annual) and employees who work under a flat rate in days agreement (‘forfait annuel en jours’).
Portuguese regulation on working time registration, besides imposing an obligation on employers to keep a record of working times (including of those employees who are exempted from a fixed working schedule), also establishes rules for employees carrying out their activity outside the company’s premises (e.g. sales personnel). For these employees, the employer must ensure that the employee signs this register immediately after returning to the company, or returns the duly signed register to the company within 15 days following the end of work outside the company’s premises.
While in Germany working time exceeding eight hours must always be recorded by the employer (who can delegate this obligation to the employees), UK employers are not required to record all hours of work performed by their employees. UK Working Time Regulations only require employers to keep ‘adequate’ records to showing whether statutory weekly working time limits and the night work limits are complied with, without covering daily or weekly rest.
EU countries will have to take this recent judgement into account and verify if their current legislation is compliant with it, and therefore with the Charter and Working Time and OSH Directives. A detailed review of the current time recording obligations on employers in eight European jurisdictions is provided below.
Working time recording regulation across Europe
Austria
According to section 26 of the Austrian Working Time Act (AZG) employers are obligated to record employees’ working hours, especially the start and end of working time plus rest periods. Part-time workers and employees with limited roles are included in the ambit of the AZG, but managerial employees with decisive management functions are excluded.
The concrete modalities of recording working time are not regulated by Austrian legislation, but the protective function of section 26 paragraph 6 AZG means records of working time have to be comprehensible.
If the chosen recording system can be qualified as a control measure that could affect human dignity, works council consent is required by means of a works agreement (Section 96 paragraph 1 Z 3 AZG).
If the employee agreed to record his or her own working time (which particularly applies to flexitime workers), the employee has to be instructed how to manage recording working time properly by the employer.
At the end of the agreed duration of the flexitime period the employee has to deliver the work records to the employer to be verified. If the employer controls employees’ working time using a time-recording system, the employer has to provide a copy of the working time records to the employee on demand. Otherwise the employee is allowed to inspect those working time records (section 26 paragraph 2 AZG).
Employees who decide their own place and time of work or predominantly pursue their profession at home only have to record the duration of their working time each day (section 26 paragraph 3 AZG).
Works agreements can state that employees referred to in section 26 paragraph 3 AZG are responsible for recording their working time; in this case the employer has to instruct the employee about the proper management of recording working time and the employee has to deliver working time records to the employer so that the employer is able to verify them (section 26 paragraph 4 AZG).
The obligation for proper recording of rest periods according to (section 11 AZG) can be omitted, if based on works agreements (or in businesses without a works council through written individual agreements) if:
The employer must render information about working time records to the Labour Inspectorate and grant access to them on demand (Section 26 paragraph 6 AZG).
There might be smaller challenges concerning, for example, home working employees, as a result of the recent European Court of Justice ruling described above, as this ruling might require employers to keep a more detailed record of their working time.
Belgium
In Belgian law, there is no general obligation to set up a system for recording the actual number of hours worked each day for employees.
There are however some exceptions to this rule.
Industry-level exceptions
In the JLC 310 (‘bank sector’) it has been mandatory since 31 December 2000 to have a time registration system, but only for employees subject to working time legislation.
Part-time employees on a regular work schedule
When part time employees deviate from their usual work schedule, there is a legal obligation to register this. There are several possibilities:
Floating work schedule
When an employee works on a schedule that contains fixed periods during which the employee must be present (‘core period’) and variable periods during which the employee chooses the beginning and end of the working day and the breaks (‘floating period’) there is an obligation to record time. This time recording must include information on the identity of the employee, the duration of his or her work performance daily, and for a part-time employee the beginning and the end of the working day and of breaks.
As long as these legal conditions are met, time registration can take different forms including, for example, timesheets filled in by employees and uploaded on a daily basis, a ‘classic’ badging system or an electronic badging system via the IT system.
France
Under French law, the employer’s obligations in relation to working time monitoring vary depending on the situation.
The first distinction is made between:
Flat rate day agreement
For employees working under a flat rate in days agreement (‘forfait annuel en jours’), the following obligations apply:
Employees whose working time is calculated in hours
For employees whose working time is calculated in hours, the following obligations apply:
For employees who work under a collective working time schedule (eg. from 9:00 to 17:00 with one hour of rest) there is no specific obligation to monitor working hours or provide them with a document showing the number of hours worked. In the event of litigation, the rules explained below (‘Litigation’) apply.
When the employees of a department or team do not work according to the same collective working time, the working time of each employee concerned shall be monitored daily, by recording (by any means) the start and end times of each work period or by recording the number of hours worked and also each week, summarising (by any means) the number of hours worked by each employee.
A monthly document, a copy of which is attached to the pay slip, is drawn up for each employee. This document must include:
In any event, employees can access any monitoring document using their right of access to their personal data.
Litigation
In the event of litigation, the employer must provide the judge with information capable of evidencing the hours actually worked by the employee. In the light of these elements and those provided by the employee in support of his or her request, the judge makes a finding after having ordered, if necessary, all the investigative measures he or she considers appropriate. In practice, the employee first has to provide the judge with information in advance to support his or her request (emails, testimonies, etc.) but the burden of proof is on the employer.
Germany
In Germany, there is no obligation for employers to record the actual working hours of their employees. Likewise, there is also no obligation for employers in Germany to report overtime to the relevant trade unions.
However, maximum permissible working time is governed in Germany by the Working Hours Act and employers are obliged to ensure that the maximum permissible working time is observed. In addition, working time exceeding eight hours must always be recorded by the employer. Section 16 paragraph 2 of the Working Time Act states that:
‘The employer is obliged to record the working time of employees exceeding the working day working time of § 3 sentence 1 and to keep a list of the employees who have agreed to an extension of the working time in accordance with § 7 paragraph 7. The records shall be kept for at least two years.’
However, employers can delegate this obligation to employees. Often for so-called ‘trust-based’ working time, employers do not record working time at all. However, employers are at least obliged to ensure that employees themselves record their overtime.
If the Working Hours Act is violated, the employer can be sanctioned with fines.
Ireland
Irish legislation already requires employers to keep detailed records of actual hours worked (Section 25 of the Irish Organisation of Working Time Act 1997 and the Organisation of Working Time (Records) (Prescribed Form and Exemptions) Regulations 2001). In practice, however, many employers do not keep the detailed records which are required by the legislation.
A breach of the record-keeping obligation may be raised in individual cases, because where there are no records, it makes it more difficult for employers to defend claims by employees that they haven’t been given their breaks or have worked more than the maximum weekly hours. However, breach of working time requirements does not typically attract very significant compensation in Ireland.
A failure to comply with the record-keeping requirements could also be identified as part of a workplace inspection and could potentially attract a fine of up to EUR 2,500 but prosecutions for failure to keep records of working time are very rare (we are not currently aware of any) and, in practice, inspectors tend to allow employers time to remedy the failure first.
For these reasons, breach of the record-keeping obligation has not historically been seen as major risk area in Ireland. It remains to be seen if this latest European Court of Justice decision will change the approach in practice.
Italy
Under Italian Law employers have a duty to complete the so-called Libro Unico del Lavoro (LUL) in which information relating to the employment relationship (including the presence or absence of each employee and working hours) is collated.
The LUL must be completed on a monthly basis (with some exceptions, e.g. for domestic employers). Inter alia this document contains information regarding days and time worked, overtime, absences, holidays and paid leave. The LUL is the result, as a matter of fact, of objective and reliable daily records, while it is not itself, the ‘objective and reliable system enabling the duration of time worked each day by each worker to be measured’ described in the European Court of Justice judgement.
An excessively strict interpretation of the European Court of Justice ruling, according to which Member States would determine the specific arrangements for implementing such system, including the form that it must take, would increase costs and the administrative burden on employers and introduce further restrictions when trends in working practice (e.g. new legislation on smart working) are moving away from linking employees’ performance to time (and place) of work.
Based on exceptions allowed by EU directives the following exceptions apply: with due regard to the general principles of the protection of the safety and health of workers, dispositions on working time do not apply to those workers the duration of whose working time, is not measured and/or predetermined or can be determined by the workers themselves on account of the specific characteristics of the activity concerned, particularly in the case of:
Portugal
The Portuguese Labour Code imposes an obligation on employers to keep a record of working time, including of those employees who are exempted from a fixed working schedule.
This record must be kept in a place that is easily accessible and allows it to be consulted immediately (e.g. by the Labour Inspection Authority). The record must indicate:
It must be recorded in a way that enables the daily and weekly number of hours to be determined, per employee.
For employees performing their activity outside the company’s premises (such as sales people), the employer must ensure the employee signs their working hours record immediately after returning to the company, or returns it duly signed to enable the company to have it within 15 days of the work having been performed.
Working time records must be kept for a period of five years. Failing to keep or maintain a record is considered a serious misdemeanour and punishable with an administrative fine.
Spain
New section 34.9 of the Workers’ Statute (introduced by Royal Decree-Law 8/2019 of 8 March) establishes that organisations must guarantee daily recording of the employee’s working day. This record must include the specific start and end times of each employee’s working day, without prejudice to any flexible hours that may be provided for.
The register must therefore contain, as a minimum, the start and end time of each worker’s working day. This is only a minimum obligation and the company can record, if it so wishes, not only the start and end time, but also the effective working time, as well as each employee’s rest times.
Please take into account that the obligation falls on the employer, not on the employee, and therefore it must be the employer that ensures time recording takes place by establishing the necessary systems for this.
The new legal provision establishes a time recording obligation for every employee without exception and regardless of any special circumstances under which they might provide services (full time, part time, teleworking, etc.). Although the Spanish government has published a Practical Guide on recording working time that excludes some types of employees from the new recording obligation, this Guide does not have any legal value, its provisions are not legally binding and the Labour and Social Security Inspectorate and Courts can disregard them.
Furthermore, the company must keep records of working hours for four years, during which time they must remain available to employees, their legal representatives and the Labour and Social Security Inspectorate.
Finally, failure to comply with the time recording obligation is a serious breach of labour law and could be sanctioned by the Labour and Social Security Inspectorate with economic fines ranging from EUR 626 to EUR 6,250.
United Kingdom
Regulation 9 of the Working Time Regulations 1998 requires employers to keep records which are ‘adequate’ to show whether the weekly working time limits and the night work limits set by the Regulations are being complied with, and retain these records for two years. However, this obligation does not cover daily or weekly rest. In addition, the Regulations do not specifically require that all hours of work must be recorded. The obligation is to keep adequate records, and it is up to the employer how to do this. It is common for employers to rely on existing records maintained for other purposes, such as pay, in order to meet this obligation. Where workers have opted out of the 48-hour week, the employer must maintain up-to-date records that specify the number of hours worked by that worker during each reference period – although in practice many employers do not currently do so accurately.
The record-keeping obligation is enforced by the Health and Safety Executive, and local environmental health departments. Failure to keep adequate records is a health and safety offence. The main method of enforcement is by way of a criminal fine, which is potentially unlimited. Individual workers cannot bring a court or tribunal claim about an employer’s failure to keep adequate records.
