May 22 2019 EU member states must require employers to record working time systematically Allen & Overy LLP | Employment & Immigration - European Union Employment & Immigration BackgroundECJ decisionImplicationsBackgroundFlexible working time models are well established in the service sector and are becoming increasingly popular among employees.Flexible working is mostly based on the principle of trust-based working time, under which working times are rarely recorded. For example, employers in Germany are only obliged by law to record employees' working hours in excess of eight hours a day; in practice, this obligation is often passed on to employees (especially in case of home office activities and field work), who often record overtime hours themselves.However, a recent European Court of Justice (ECJ) decision could change this situation.ECJ decisionOn 14 May 2019 the ECJ ruled that EU member states must require employers to establish an objective, reliable and accessible system for measuring their employees' daily working times. Without such a system, the hours and overtime actually worked cannot be reliably measured and employees' ability to enforce their rights cannot be guaranteed.ImplicationsThe ECJ's decision, which was handed down following a legal action brought by the Spanish Workers' Commissions trade union against Deutsche Bank, could have far-reaching consequences. However, the decision does not yet have a direct impact on national employers. The same applies to the EU directive on which the decision is based. EU directives are generally binding on EU member states, but become effective for employers only once they have been incorporated into national law. Consequently, there is no urgent need for action on the part of companies.In the medium term, governments will likely codify into their national laws a new regulation on time recording which imposes a direct obligation on employers. However, how such regulations will be designed and to what extent accurate time recording is feasible and necessary for certain working time models (eg, trust-based working time) remains to be seen.According to the ECJ, each EU member state enjoys a degree of discretion in the implementation of such a system, especially its form, which may have to take into account the specifics of companies, including their size and area of activity. Exceptions could therefore be possible for certain forms of work and companies of a particular size. It is also expected that it will still be possible to delegate the recording of working times to employees.The extent to which the legal implementation of the ECJ decision will affect new working time models remains unclear. However, employers should already start considering how to design a new recording system.It is now up to the EU member states to move largely outdated working time regulations – most of which date from the industrial age – into the service and digitalisation age and to establish a legal framework for recording working times which adequately takes into account the peculiarities of new forms of work in the context of Work 4.0 (and soon, 5.0).Concerns expressed about the reintroduction of time clocks are entirely unfounded. Recording time via apps on mobile devices will certainly be permitted and may support agile and flexible working irrespective of the employees' individual workplace.The implementation of technical time-recording systems will also be a hot topic for works councils, which largely have a say in the implementation and shaping of such systems (eg, in Germany). A good relationship between employers and their works councils is therefore essential.For further information on this topic please contact Sören Seidel at Allen & Overy LLP by telephone (+49 40 82221 2154) or email ([email protected]). The Allen & Overy LLP website can be accessed at www.allenovery.com.