Clarity regarding the recording of working hours: the BAG’s reasons for its time-clock ruling

On Friday, 2 December 2022, the eagerly awaited reasons for the BAG’s decision in the time-clock ruling were published. With astonishing clarity, the Senate, under Presiding Judge Inken Gallner, took a stand on previously raised practical issues regarding the recording of working hours. We explain what companies now have to watch out for.

On 13 September 2022, in a decision often described as a "thunderbolt" (1 ABR 22/21), the German Federal Labour Court [Bundesarbeitsgericht, BAG] derived an obligation to record all working hours from Sec. 3 (2) No. 1 of the German Occupational Health and Safety Act [Arbeitsschutzgesetz, ArbSchG]. We had also reported on this in our articles Electronic time recording - BAG creates clarity and uncertainty at the same time and Electronic time recording - BAG creates compliance risk for companies. However, the press release issued by the BAG at the time raised a number of questions. These included, for example, whether working hours must be recorded electronically or whether the frequently used manual "timesheet" is (still) sufficient. In its reasons for the decision, the BAG has now commented with surprising clarity on the questions raised. 

As you may recall: the BAG had to decide on a case in which a works council asserted a right of initiative regarding the introduction of an electronic working time recording system. However, overturning the previous decision of the Regional Labour Court [Landesarbeitsgericht, LAG] of Hamm (decision of 27 July 2021 - 7 TaBV 79/20), the BAG rejected this on the grounds that an obligation to record all working hours already arises from Sec. 3 (2) No. 1 of the German Occupational Health and Safety Act (ArbSchG). Therefore, this no longer leaves any room for a right of initiative of the works council pursuant to Sec. 87 (1) introductory half-sentence of the German Shop Constitution Act [Betriebsverfassungsgesetz, BetrVG]. 

In the reasons for its decision, which have now been published, the BAG states that the ECJ had already established in its CCOO decision (judgement of 14 May 2019 - C-55/18) that employers are obliged to set up an objective, reliable and accessible system for recording all working hours. This is derived, among other things, from Article 6 (1) of Directive 89/391/EEC (the so-called Occupational Health and Safety Directive). This, in turn, had been transposed into national law by Sec. 3 ArbSchG with almost identical wording. Accordingly, German law already currently requires that companies record working hours. 

Following the publication of the BAG’s brief press release, a large number of questions arose, particularly in the business community, which have now been commented on by the BAG in its reasons for the decision: 

• Companies are already currently required to introduce and also use a system for recording working hours. 
• Electronic time recording is not mandatory; rather, a manual timesheet can (still) be used to record working hours. When choosing the time recording system, companies must take into account the specifics of the areas of work of the employees concerned in each case, as well as the peculiarities of the company, in particular its size. Purely economic considerations are not sufficient. 
• The introduction of a company-wide standardised time recording system is not required. A distinction can be made between different types of work activities. 
• The actual recording of working hours may be delegated to employees. 
• In the opinion of the BAG, there is no obligation to record the working hours of executive employees. From this, one can draw the conclusion a fortiori that the working hours of managing directors also do not have to be recorded. The doctrine applied by the BAG here seems more than questionable however, since an exception criterion of the German Working Hours Act [Arbeitszeitgesetz, ArbZG] is being applied to a general regulation of the ArbSchG. 
• In our view, trust-based working time will continue to be possible, provided that this is understood to mean freedom to decide on the scheduling of the working hours. In compliance with the requirements of the ArbZG and the obligation to record time arising from the ArbSchG, trust-based working time can continue to be practised. 

The BAG’s reasons for its decision provide clarity for many companies - albeit with some questionable justification. Nevertheless, the BAG makes its legal decision subject to future changes by the legislature and thus clearly puts the ball into Berlin’s court.

It remains to be seen how the traffic-light coalition will address the reasons for the decision and the legal regulations in place so far in the coming year. 

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