Current developments in working time recording

Involving the works council

However, where there is a works council, employers can be forced to act even before a statutory regulation comes into force. The BAG ruled last year that the works council does not have a right of co-determination as to “whether” to introduce a specific working time recording system, but does have a comprehensive right of co-determination in the "how", i.e. the design of the time recording system. As a result, the Regional Labour Court Munich (22 May 2023 - 4 TaBV 24/23) has now followed the BAG's reasoning and confirmed such a right of the works council with regard to the design of a time recording system to be used in the company.

The decision from Munich deals with questions of practical relevance regarding the limits of the works council's right of initiative with regard to the design of a time recording system that already exists in the company. According to the LAG, the question of extending an existing time recording system in a company to a group of employees not yet covered by it is a question of "how" time recording is organised - and not "whether". In our opinion, however, there is certainly room for interpretation, as the boundary between the "whether" and the "how" of time recording can often be blurred. It therefore remains to be seen whether other labour courts will follow the line of reasoning of the Munich Regional Labour Court. In any case, this will be relevant for companies with already established working time recording systems that are only limited to certain groups of employees. They are now likely to be confronted with initiatives by their employee representatives to extend the working time recording system.

Draft bill of the BMAS

Although the draft bill published by the BMAS on 18 April 2023 on the regulation of an obligation to record working hours contains some clarifying regulatory points, it also contains numerous unanswered questions:

a) Trust-based working hours

On the one hand, it is questionable whether the previous trust-based approach will continue in light of the BAG ruling. In practice, this has regularly been understood to mean both a waiver of working time monitoring and a waiver of working time recording. However, pursuant to Section 16 (4) Draft Working Time Act, employers must ensure that they become aware of any violations of the provisions of the German Working Time Act by taking appropriate measures, for example by undertaking random checks of the records of their employees where the employer waives the monitoring of contractually agreed working hours.

b) Personal scope

The draft bill currently excludes executive employees within the meaning of Section 5 (3) BetrVG (Section 18 (1) no. 1 ArbZG) and non-employees (Section 2 (2) ArbZG) from the obligation to record working hours. In its decision of September 2022, however, the Federal Labour Court derived the recording obligation from Section 3 (2) no. 1 ArbSchG, with the result that all employee groups as well as civil servants and judges (Section 2 (2) ArbSchG) would be included due to the definition of employees in the ArbSchG. Accordingly, the question arises as to whether the BMAS had deliberately deviated from the BAG's decision or had simply not considered it.

c)Electronic time recording

In addition, the draft bill only provides for electronic recording of working time (Section 16 (2) sentence 1 ArbZG-E). It remains unclear whether, for example, an Excel spreadsheet would also be sufficient or whether only automated time recording systems would be permitted. According to the explanatory memorandum of the BMAS, electronic recording should increase the chances of correct recording. However, it remains unclear why this should not be possible with non-electronic recording.

d) Break arrangements

Finally, the draft bill does not contain any regulation on the obligation to record daily breaks. In this respect, it could be argued that only the start, end and duration of the total daily working time must be recorded. However, the wording of Section 16 (2) sentence 1 ArbZG-E can also be interpreted to mean that each break is to be equated with the start of a new period of daily working time. Consequently, each break could then be associated with an obligation to document the start, duration and end of the block of working time worked. Clarification from the legislator would (also) be desirable here.

Increased reporting due to whistleblower protection

As whistleblowers are subject to the statutory protection of the HinSchG, the new Whistleblower Protection Act should significantly lower the threshold for reporting a violation of the Working Hours Act or a possible recording obligation to an internal or external body. We therefore expect to see more official investigations under the ArbSchG or ArbZG based on internal whistleblowers in the future. 

This applies all the more in light of the fact that some labour inspectorates in the federal states are already randomly checking compliance with the obligation to record working hours - usually on the basis of external information - and are also imposing deadlines for implementation within the scope of their powers. If such an official order is not complied with, a fine may be imposed.

Involving the works council

As the establishment of an internal reporting channel is required by law for employers with at least 50 employees, there is no co-determination right under legislation regarding the works council with regard to its establishment. However, the works council has a right of co-determination in accordance with Section 87 No. 1 BetrVG to the extent that the HinSchG leaves the employer with flexibility, i.e. in the design and organisation of the internal reporting channel. The staffing of the reporting office and the introduction of technical monitoring can also trigger co-determination rights.