Digital age - new challenges for working time...

Summary

Due to the digital and global age, the world of work is undergoing profound change. In the interests of employees and employers, the legal situation must be adapted to the new realities. This is particularly the case with the German Working Hours Act (ArbZG): in summary

• the sector exemption for managers be significantly extended in line with many other EU member states
• the maximum daily working hours are made more flexible
• further exceptions to the rest period and maximum working hours must be permitted by company agreements and collective bargaining agreements as well as for business trips.

Reasons for the need for change

With its landmark decision of September 13, 2022[1], the Federal Labor Court has brought the topic of working hours into the media spotlight. In it, it stated that all companies are obliged to record the daily working hours of their employees, which has already become apparent following the ECJ's time clock ruling from 2019 [2]

The German Ministry of Labor then quickly announced that it would make further changes to the ArbZG and published the long-awaited draft bill on April 18, 2023. It provides for a new regulation of para. 2 of Section 16 ArbZG and the addition of paras. 3 to 8.[3] It is to be expected that the law will pass parliament before April 2024.

This obliges the employer to electronically record the start, end and duration of the daily working time on the day the work is performed. However, it is possible to delegate the recording to employees or third parties. Trust-based working time models are also still possible according to para. 4 new version if the employer waives the control of working time. The employer only has to ensure that it is aware of any infringements of rest periods, for example. Furthermore, the employee is granted a right to information about the recorded working time and the recording is to be stored for a period of two years. 

Exceptions are to be possible in certain cases through regulations in collective bargaining agreements or works agreements in accordance with para. 7 as amended. 

However, a more far-reaching reform of the ArbZG is required with the aim of adapting it to the new reality of work. This reform is necessary as key provisions of the ArbZG are tailored to an analogous working environment and the current draft is not far-reaching enough in this respect.

The predecessor of the ArbZG - the working time regulations[4] - came into force in 1924. Restrictions such as limiting the regular working day to eight hours date back to this time.[5] Regulations such as these clearly served the interests and health protection of employees at the time, as the majority of workers were still performing heavy physical labor under often precarious conditions. The legal regulations protected employees from exploitation and were intended to preserve their physical health in particular. 

A century later, the world of work in Germany, like everywhere else, is undergoing profound change. The main driver of the changing world of work is technological progress, which is massively changing work content, work equipment and work organization. This is triggered by the ever more extensive use of mobile digital devices and the associated communication options, as well as the increasing use of (intelligent) software and automation. This ever more extensive and rapid change is having a lasting impact on numerous professions: they are becoming increasingly digital and networked. For example, over 50% of employees state that their job can be done from home.[6]

Occupational fields have also changed dramatically: Whereas 100 years ago the majority of people were blue-collar workers, office jobs are now the most common occupational field for Germans.[7] As a result, in 1925 only around 25 % of employees covered by the working time regulations were white-collar workers; the other 75 % were blue-collar workers.[8] Whereas in 1980 this proportion of white-collar workers was still below 50%, today it is just under 80% within the scope of the ArbZG.[9]

The ArbZG therefore applies to professions in which it is increasingly irrelevant from which location and generally at what time the work is carried out. Employees therefore often express the need to be able to organize their place and time of work individually, flexibly and according to their personal needs. This is only insufficiently possible under the current legal situation in Germany: it considerably restricts mobile and flexible working.

Even the original purpose of the ArbZG - health protection - is no longer served by the strict legal requirements. Rather, more flexible options allow for greater health protection: with standardized working hours, an employee's private life is inevitably also based on these. If, on the other hand, employees are allowed to determine their own working hours, they can adapt them to their private lives.

In this context, the provisions of the ArbZG, which have remained unchanged for decades, have fallen out of time. Misguided overprotection of employees, the majority of whom no longer want this, is damaging Germany's competitiveness. 

Although the draft bill attempts to adapt to the changing times, for example through electronic working time recording, it fails to make the necessary changes to make working hours more flexible. 

In other EU member states, the regulations demanded here by the Senate of the Economy have long been a reality.[10]

Comparison with the laws of other EU Member States

Working time legislation in the EU is based on the Working Time Directive 2003/88/EC (WTD).[11] This was implemented in Germany by the ArbZG. A reform of the ArbZG is only permissible within the limits permitted by the ArbZ-RL. However, the ArbZG sets stricter requirements in key points than the Working Time Directive and the laws of other EU countries. The current German legal situation, including the draft presented, therefore prevents individual working time models, which are often in the (private as well as professional) interests of employers and employees. In particular, the possibilities of the Working Time Directive for more flexible working time arrangements are far from exhausted when it comes to the maximum permitted daily working time. 

As a result, employees in a wide range of professions find themselves in a conflict between their personal life situations and the legal regulations in a wide variety of situations. Examples of this are

• Parents want to alternate between working ten hours a day and finishing work after six hours the next day so that they can look after their children.
• After eight hours of work, a certain task is almost finished. It is a good idea to finish it, for example because the employee is currently "in the subject" and therefore does not have to come into the office the next day.
• On the way back from a business trip, an employee driving a car gets caught in a traffic jam. If he has already worked seven hours within the meaning of the ArbZG due to the business meeting and the car journey and is still two hours away from his home due to the traffic jam, he will probably not drive to the nearest hotel to comply with the provisions of the ArbZG, but will either take a break extended by one hour or enter the last hour on the next working day.

In practice, therefore, many employees resolve the conflict by circumventing the provisions of the ArbZG in their own interests. As a result, there is no other area of employment law where legal theory and reality are so far apart. These and countless other conflict situations can be resolved if the leeway provided by the Working Time Directive is incorporated into the draft as follows:

Concrete proposals

• Exception for managers

The Working Time Directive makes it possible to exempt certain groups of people (Art. 17 Working Time Directive). In particular, this is possible for "persons with autonomous decision-making powers", taking into account the general principles of protecting the health and safety of workers.[12] The ECJ defines this as employees whose total working time is not measured or predetermined or cannot be determined by the employees themselves due to the nature of the work performed.[13]

In contrast, in German law, only executive employees have been excluded from the scope of the ArbZG in Section 18 (1) No. 1 ArbZG. The term "executive employee" as defined in the Works Constitution Act[14] is therefore much narrower than the provisions of the Directive. Experience has shown that only around 5% of a company's employees in Germany are managerial employees.[15] This regulation is no longer up to date due to modern forms of work and also does not correspond to the original protective concept of the law. This is because the need for individual working hours arises in particular in professions in which employees can determine their own working hours.[16] These professions are less in need of protection due to this personal responsibility and the higher salary that usually accompanies it.

The draft bill takes up the ECJ's definition and, in Section 16 (7) ArbZG as amended, now makes it possible to exempt certain groups of employees[17] from the obligation to record working time if the working time of the employees cannot be measured or is determined in advance or can be determined by the employees themselves due to special characteristics of the work performed. However, this exemption can only be stipulated within the framework of collective bargaining agreements. As a result, large numbers of employees are excluded from the scope of application because they are not covered by collective bargaining agreements and therefore the provisions of collective bargaining agreements do not apply to them. Although the possibility of exemptions has been extended pro forma, this will hardly make any difference in practice.

The consequence of the only minimal exemption of certain areas is therefore that significantly more groups of people are subject to the rigid regulations of the ArbZG than would be possible under European law: Other EU Member States have already made much more extensive use of the exemption of groups of people from the scope of application of their labor laws:

• In France, there is a group of employees known as "cadres", who have the autonomy to essentially determine their own working hours and organization and whose type of work means that they do not follow the company's standard (collectively agreed) working hours.[18] Around 19% of employees in France are cadres.[19]  These employees are allowed to work up to 218 days per year. There is therefore no maximum daily or weekly working limit for this group of people, only an annual limit. The group of "cadres" is similar to the German understanding of non-tariff employees and therefore includes significantly more employees than the group of managerial employees in Germany. 
• In the Netherlands, according to the Dutch Working Hours Regulation[20] , employees who earn at least three times the statutory minimum wage plus a vacation allowance are excluded from the scope of the Dutch Working Hours Act[21] . Currently, the exception already applies to an annual salary of around €75,000. It is based solely on the level of pay; there are no other requirements. In Germany, over 13% earn more than € 75,000.[22]
• In Austrian law, the wording in the Austrian Working Hours Act is virtually identical to the Working Time Directive: It excludes from the scope of application employees "to whom significant independent decision-making authority has been delegated and whose total working time is either not measured or predetermined or can be determined by these employees themselves in terms of position and duration due to the special characteristics of the job".[23] In Austria, around 13% of employees are managers.[24] Other groups of employees such as scientists in research, professional athletes and military personnel on operations and exercises are also excluded.
  
  
• No maximum daily working hours

Both the EU Directive and the ArbZG stipulate maximum permitted working hours and limit the scope for flexible and individual agreements. They refer to different points of reference:

While only the maximum weekly working time is set at 48 hours at European level,[25] the maximum daily working time in Germany is limited to eight hours.[26]

As the EU Directive does not stipulate a maximum daily working time, the distribution of working time over the six working days can be quite variable. It is only limited by the daily rest period of eleven hours, so that a daily working time of up to 13 hours including rest breaks is possible under European law. A flexibilization of the ArbZG with regard to the maximum daily working time is therefore possible under European law, provided that the weekly working time of 48 hours is not exceeded.

Deviations from the maximum weekly working time are also possible: Art. 22 para. 1 of the Working Time Directive establishes an opt-out rule. This allows Member States to make the maximum weekly working time of 48 hours inapplicable if the general principles of employee health and safety are observed and other protective measures specified in the article are taken. Only the written consent of the employee is required. A look at other EU Member States confirms that significantly more flexible and therefore more sustainable arrangements for maximum working hours are possible:

• In Austria, the maximum permitted daily working time was extended to twelve hours and the permitted weekly working time to 60 hours on September 1, 2018.[27] As a restriction, the average weekly working time may not exceed 48 hours within a reference period of 17 weeks; this reference period can be extended to up to 52 weeks by collective bargaining agreement.[28] In addition, these maximum working hours may be exceeded further under certain conditions.[29]
• In the Netherlands, too, a maximum working time of 12 hours a day and 60 hours a week is permitted under the Dutch Working Hours Act.[30]
• In Italy, the daily working time is not regulated and is therefore indirectly limited to 13 hours due to the daily rest period of 11 hours.[31]

In Germany too, in order to adapt the legal situation to the changing world of work, it is essential to make the maximum daily and weekly working hours more flexible. 

• No Sunday rest

On a daily basis, the Directive and the ArbZG do not differ with regard to rest periods: both require an eleven-hour rest period between working hours.

On a weekly basis, the directive only requires a continuous rest period of 24 hours over a period of seven days.[32] The German ArbZG, on the other hand, prohibits working on Sundays and public holidays.[33]

The directive allows for deviations from the daily and weekly rest periods under further conditions by means of a collective bargaining agreement or by means of a works agreement, e.g. for parents with young children.

• Exceptions for business trips

There is also an urgent need for action with regard to the assessment of business trips under working time law in order to enable legally secure handling. Business trips are regarded as working time if a certain degree of strain is exceeded: travel time is taken into account when calculating maximum working time limits and rest periods if the employee works during these or is otherwise required to do so, for example because he/she has to drive a vehicle. According to recent ECJ case law, working time already exists if the employee has to spend time in a place where they are significantly restricted in their leisure activities.[34]

On the one hand, the aforementioned flexibility options can also be used for business trips. On the other hand, the Directive contains an opening clause specifically for business trips in Art. 17 Para. 3 a) of the Working Time Directive.  This allows the national legislator to deviate from the rest breaks prescribed by EU law, provided that an equivalent compensatory rest period is granted. In this regard, the following regulation - which already exists in Austria -[35] must be implemented: During a business trip - provided that the employee does not have to perform any work during this trip - the maximum working time limit may be exceeded and the daily rest period may be reduced up to twice a week.

• Amendment of other laws

The changing world of work does not stop at the limits of the ArbZG. In order to comprehensively adapt the current legal situation to the new requirements, a "major overhaul", i.e. the simultaneous adaptation of other laws, is desirable.

For example, the works council has a comprehensive right of co-determination in the introduction and use of technical equipment.[36] The negotiation of IT works agreements often takes far too long due to the lack of technical qualifications of the works council members and an overload of the works council, so that innovations are paralyzed or even prevented with the result that entire value chains sometimes come to a standstill. A targeted restriction of co-determination rights would counteract this.

Conclusion on the draft bill of the ArbZG

Overall, the draft presented so far falls completely short of expectations. Apart from the possibility of exceptions through collective bargaining agreements, no flexibilization of working hours has been made possible. The hope that the draft would extend the maximum daily working time or change it to a maximum weekly working time, create further exceptions for certain groups of employees or introduce special regulations for business trips has not been fulfilled.

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