On 23 March 2017, the Spanish Supreme Court (the "Supreme Court") delivered a judgment upholding an appeal lodged by Bankia against a judgment rendered by Spain's National Court last 4 December 2015, which made it compulsory for companies to implement mechanisms to record the hours effectively worked by their employees.

The Supreme Court's judgment, which releases companies from the obligation to implement those mechanisms, was made after undertaking detailed analysis of Spanish and European legislation on overtime as well as the current Spanish case law on the subject matter; it also overturned the National Court's decision.

The Supreme Court concluded that article 35.5 of the Spanish Workers' Statute (which regulates overtime) does not contain or impose an obligation to record the daily working hours performed by employees; it only imposes an obligation on companies to keep a record of overtime worked. Accordingly, as it is not a legal duty, no specific sanctions have been imposed for a potential breach.

Furthermore, the Supreme Court's decision goes on to state that no harm is caused to employees, who may challenge the information provided and recorded by the employers on overtime worked. The Supreme Court concluded that, although it was desirable to amend those regulations to clarify companies' obligations on the issue at hand, no such obligation currently exists and it is not the place of the court to usurp the legislator and impose obligations on its behalf.

It should be pointed out that this decision has not been devoid of controversy as (i) it was passed with the dissenting vote of five of the 13 judges of the Supreme Court's labour tribunal and (ii) labour inspections have recently been conducted on the basis of the National Court's prior, and now overturned, judgment.