The facts

As part of a dispute with a Spanish trade union, the Spanish subsidiary of a German financial institution had raised the question of whether the company needed to have a system for recording employees’ working hours. It was undisputed that such a system did not exist. This was due to the fact that, according to the company, Spanish law did not provide for a general obligation to record working time. According to the trade union, this was incorrect, as local provisions would have to be interpreted in the light of the Working Time Directive. Accordingly, the company would be obligated to implement a working time recording system.

The decision

The Court of Justice of the European Union ruled in favor of the trade union.

In its view, “a national law which does not provide for an obligation to have recourse to an instrument that enables the objective and reliable determination of the number of hours worked each day and each week is not capable of guaranteeing … the effectiveness of the rights conferred … by this directive (author’s note: the Working Time Directive).” It follows that, "in the absence of a system enabling the time worked each day by each worker to be measured there is nothing to ensure … that actual compliance with the right to a limitation on maximum working time and minimum rest periods conferred by Directive 2003/88 is fully guaranteed to workers …" To ensure this, "the 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."

Notes for practice

The decision has provoked mixed reactions. Conservative commentators advise employers to implement the court’s requirements for the time being and to fully record employees’ working hours. Courageous commentators view the decision in a more relaxed manner, referring to (alleged) particularities of Spanish law and to the requirements of the German Working Time Act, which does not contain a general obligation to record working time.

While it is correct that the German Working Time Act does not contain such an obligation, it is also undisputed, however, that the Spanish provisions do not differ significantly from the German ones. Consequently, the CJEU would likely have considered a comparable situation, governed by German law, to be similar.

The widespread practice of trust-based working time in Germany cannot be reconciled with the statements in the judgement. For the period until the German legislator has concluded its scheduled review of the decision and the potential introduction of new statutory provisions, companies need to make a fundamental decision: If trust-based working time continues to be handled as previously, it will be in line with the Working Time Act (at least it can be designed to do so), but contrary to European law. If companies are not willing to take this risk, but do not want to make excessive technical and administrative efforts either, employees should at least be encouraged to record their working times on individual lists. The records should then be forwarded to the HR department at regular intervals.

On a practical level, we do not view a particularly urgent need for action: on the one hand, unlike in Spain, there are fewer possibilities to initiate similar proceedings – in principle, by the works council. On the other hand, trust-based working time is popular – it is not very likely for a works council to be intent on “destroying” the set-up that enjoys a high degree of popularity with employees.