The Time Clock for Everyone? A Deeper Look at New European Rules for Time Recording

5/30/19

HR Policy Association has already flagged that hours of work will be a hot topic in many parts of the world in 2019.  Japan and Korea are taking steps to reduce chronically long working hours.  In India, arguments continue about who is and who is not entitled to overtime pay—a mirror of the wage and hour issues faced in the U.S.  In the EU, the European Court of Justice (ECJ) recently ruled that employers must fully document working hours.  It has to be understood that in Europe, the issue of working hours is not related to who gets paid overtime and how much—it is a health and safety issue designed to assure a safe working environment for all categories of workers.  Everyone will be familiar with the maximum 48-hour week and its exceptions.

In the aftermath of the ECJ judgment, Alan Wild spoke to Germany-based European employment lawyer Gerlind Wisskirchen of CMS.

Gerlind explained that on May 14, 2019, the ECJ ruled that the recording of working hours must go beyond the daily documentation of overtime (Case C-55/18).  The practice of requiring just "peak time recording," thus excluding those hours that exceed eight hours per working day, has now been declared insufficient by the ECJ.  The judgment comes as a result of a claim by the Spanish trade union FSCO to require Deutsche Bank to record all of the daily working hours of workers.  The union claimed that 53.7% of overtime hours in Spain have, to date, not been properly recorded.  The National Court of Justice in Spain referred the case to the ECJ.

The ECJ judges, sitting in Luxemburg, referred to the Charter of Fundamental Rights and the EU Working Time Directive 2003/88/EC as grounds for their judgment.  This guarantees "the fundamental right of every worker to a limitation of maximum [48] working hours and to daily and weekly rest periods."  These laws meant that the introduction of a system for recording working time was essential.

Gerlind went on to explain the inevitability of changes in laws and regulations in most European countries and potentially an end to the “informal” or “trust-based” working arrangements widely used by employers.  EU Member States will have to compel employers to set up an appropriate timekeeping system.  The Member States themselves will be able to decide on the implementation details and, of course, the governments themselves are major employers.  The ECJ made it clear that it is possible to take into account special circumstances, such as the nature of the work or the size of the company, but it must nonetheless 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."

The widely-used form of informal or "trust-based working time" for many categories of worker is at risk.  We will soon begin to see how Member States respond, but in Austria, for example, full documentation of working time by employers still permits many employers to allow trust-based work.

Gerlind was keen to explain that “no immediate obligation for employers to act can be derived from the ruling” and the problem today rests with governments.  That said, as is the case in many other countries in the world, employers in the EU will have to cope with additional bureaucracy in the future.  We’ll revisit this in three months with what the States seem to be up to.

Contact Alan Wild at awild@hrpolicy.org or Gerlind Wisskirchen at gerlind.wisskirchen@cms-hs.com.