Time clock Ruling By Eco Obligates Federal Labour Court to Take Decision for Employers in Germany to Record Working Hours
Karma Management has now become Karma Management Global Consulting Solutions Pvt. Ltd. which was incorporated in the year 2004, and has now successfully completed almost 18 years of its existence.
As late as April 2021, Karma Global took a very bold step of venturing into foreign shores in terms of shoving up its business in countries like the US, UK, UAE, Canada, Philippines, and South East Asia.
It has already made its mark in terms of providing excellent services in the areas of payroll, outsourcing, recruitment and talent acquisition, and regulatory compliances in these foreign countries as per feedback and testimonials shared by Global Clients.
Karma thus entails the compliances of global clients in these countries as well, and in keeping with the global scenario, it does keep a very hard track of the status of global compliances all around the world and especially so, it keeps an update on what is happening as far as people, wages, work, and benefits are concerned across the globe.
Before we go to talk about ECJ’s Time clock ruling, let us take a look at which all countries are there in the European Union.
The EU’s members are Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
Let us understand how many countries in Europe use Euros
The European Union is a group of 28 countries that operate as a cohesive economic and political block. 19 of these countries use EURO as their official currency. 9 EU members (Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom) do not use the euro.
What is the European Union (EU)?
The European Union (EU) is a group of 27 nations in Europe, formed in the aftermath of World War II. The first batch of countries joined in 1957, including Germany, France, Italy, Belgium, Luxembourg, and The Netherlands. In 1973, Denmark, Ireland, and the United Kingdom joined.
The European Union (EU) is a supranational political and economic union of 27 member States that are located primarily in Europe. Nations in Europe. The union has a total area of 4,233,255.3 km2 (1,634,469.0 sq. mi) and an estimated total population of about 447 million. The EU has often been described as a sui generis political entity (without precedent or comparison) combining the characteristics of both a federation and a confederation.
Court of Justice of the European Union (CJEU)
Overview
- Role: Ensuring EU law is interpreted and applied the same in every EU country; ensuring countries and EU institutions abide by EU law.
- Members:
Court of Justice: 1 Judge from each EU country, plus 11 advocates general
General Court: 2 Judges from each EU country
- Established in: 1952
- Location: Luxembourg
- Website: Court of Justice of the European Union (CJEU)
The Court of Justice of the European Union (CJEU) interprets EU law to make sure it is applied in the same way in all EU countries and settles legal disputes between national governments and EU institutions.
It can also, in certain circumstances, be used by individuals, companies or organizations to take action against an EU institution, if they feel it has somehow infringed their rights.
What does the CJEU do?
The CJEU gives rulings on cases brought before it. The most common types of cases are:
- interpreting the law (preliminary rulings)– national courts of EU countries are required to ensure EU law is properly applied, but courts in different countries might interpret it differently. If a national court is in doubt about the interpretation or validity of an EU law, it can ask the Court for clarification.
- enforcing the law (infringement proceedings)– this type of case is taken against a national government for failing to comply with EU law. If the country is found to be at fault, it must put things right at once, or risk a second case being brought, which may result in a fine.
- annulling EU legal acts (actions for annulment)– if an EU act is believed to violate EU treaties or fundamental rights, the Court can be asked to annul it – by an EU government, the Council of the EU, the European Commission, or (in some cases) the European Parliament.
Private individuals can also ask the Court to annul an EU act that directly concerns them.
- ensuring the EU takes action(actions for failure to act) – the Parliament, Council, and Commission must make certain decisions under certain circumstances. If they don’t, EU governments, other EU institutions, or (under certain conditions) individuals or companies can complain to the Court.
- sanctioning EU institutions (actions for damages) – any person or company who has had their interests harmed as a result of the action or inaction of the EU or its staff can take action against them through the Court.
ECJ’s RULING IS PUT TO AN END BY GERMANY’S HIGHEST LABOUR COURT WITH AN OBLIGATION TO RECORD WORKING HOURS
A recent decision of the German Federal Labour Court (Bundesarbeitsgericht) shows yet again that the issue of working time remains highly fraught for German employers. Following a 2019 ruling of the European Court of Justice (ECJ) setting forth an obligation on the part of European Union employers to establish objective, reliable, and accessible systems for recording their employees’ daily working time, the subject of working time became a widely discussed topic throughout Germany. The Federal Labour Court effectively put an end to such discussions with its decision of September 13, 2022.
Background: The “Time Clock” Ruling of the ECJ
In May 2019, the ECJ ruled in its judgment that EU Member States must require employers to systematically record the working time of their employees. After interpreting the Directive 2003/88/EC in connection with the EU Charter of Fundamental Rights, the ECJ concluded that only by introducing objective, reliable, and accessible systems for recording and tracking employees’ daily working time could EU Member States assess employers’ compliance with the EU Working Time Directive in furtherance of the law’s purported goal of ensuring the safety and health of employees. The Member States were tasked with determining the details of implementing the ECJ’s ruling.
DUTY OF EMPLOYERS
The Working Time Act requires German employers to record the working time of employees only in exceptional cases, such as work performed on Sundays and public holidays and overtime work. The EC J’s decision, therefore, gave rise to uncertainty as to whether employers were under a more comprehensive obligation to record working time, in addition to employers’ concerns regarding implementation and the practical consequences of such obligation. The primary concern was whether the ECJ’s requirements were directly binding upon German employers or whether the law would need to be explicitly implemented in German law to be enforceable against German employers. As a preliminary result of legal discussions in Germany, ultimately, the German legislature was expected to first establish a legal basis for imposing a general time recording obligation on employers.
Ground-breaking Federal Labour Court Ruling
With its September 13, 2022 ruling (Case No. 1 ABR 22/21), the Federal Labour Court pre-empted the German legislature with regard to imposing a requirement on employers to record working time. In line with the ECJ’s 2019 ruling, the Federal Labour Court ruled that a statutory obligation to record working time already exists.
The underlying legal dispute initially seemed rather low-key: an employer and a works council disputed whether the employer could be obligated to introduce an electronic working time recording system upon the works council’s initiative. When its negotiations with the employer on a works agreement regarding working time recording had failed, the works council called a conciliation body. The employer objected to the competence of the conciliation body, arguing that the works council lacked a corresponding right to initiate the implementation of a working time recording system in the first place.
The Lower Labour Court agreed with the employer. The State Labour Court, however, upheld the works council’s judgment and affirmed its right of initiative.
The Federal Labour Court eventually denied the works council’s right of initiative with regard to the introduction of a working time recording system with a ground-breaking justification: if, and to the extent that, a statutory regulation already existed, a right of initiative on the part of the works council was obviated.
FEDERAL COURT MANDATES AS STATUTORY DUTY
According to the Federal Labour Court, a statutory duty to record working time arose from Section 3 (2) No. 1 of the German occupational health and safety law, which the court interpreted to be in conformity with EU law.
The Federal Labour Court stressed that employers, as part of their basic duties, where required by law to implement measures necessary to protect the safety and health of employees, and, in doing so, employers must also ensure suitable organization and provide the necessary resources.
According to the Federal Labour Court, these duties include an obligation on the part of employers to introduce systems for the recording of working time, as the ECJ held in 2019.
Few could have foreseen that a seemingly low-key legal dispute would result in such a ground-breaking decision.
The Federal Labour Court’s decision contradicts the claim that the issue of whether employers are required to record working time is the legislature’s primary responsibility. With the Federal Labour Court’s decision, employers are immediately required to start recording working time.
CONCLUSION:
The Federal Labour Court’s decision is likely to have significant practical consequences for employers in Germany—especially for employers that have not yet introduced comprehensive systems for recording working time.
For employers relying on mobile working and trust-based working time arrangements, the decision could also be game-changing: a comprehensive obligation to record working time may in practice often conflict with such working time structures.
For the time being, it remains unclear which specific requirements a system for the recording of working time must meet. In its 2019 ruling, the ECJ gave only general explanations regarding this issue and expressly declared that EU Member States are responsible for more detailed regulations concerning the required design of such systems for recording daily working time. It remains to be seen whether and to what extent the Federal Labour Court has made more detailed statements in the ruling statement, which has not yet been published.
Nevertheless, it already seems clear that in the opinion of the Federal Labour Court’s judges, employers will be hard-pressed to avoid introducing comprehensive working time recording systems in the future. Until the courts and legislature impose specific requirements, employers that implement systematic daily and weekly time recording procedures that ensure objective and reliable documentation of daily working hours will likely be off to a good start.
Karma while dealing with all such issues and cases, always takes the approach to act trustworthily and to be compliant with the laws of the land.
Karma always advises its clients to be on the good side of the law and to abide by the same. In this respect, it offers a plethora of excellent services in terms of documentation compliance and validity of licenses for running the business and also supports establishments and union-afflicted workers to take a just stand on issues, in the company’s interest and not on trivial grounds just for the sake of it, to show the level of aggression.
Respect for all fundamental principles and rights at work (FPRW), including freedom of association and the right to collective bargaining, is an essential foundation of the ILO and key to successful policy and decision-making. As the world of work is changing at an ever-increasing pace, strong, influential and inclusive social dialogue is, and will be, a key vehicle to shape the world of work that we want.
Karma Management’s integrated regulatory compliance services run on expert machinery that is agile and consistent and is simplified for the global clients in a manner that they can easily grasp the subject matter against the tangled complexity and risk, which gives the global clients the power of confidence and control.
Karma Global is well aware that the lengthening list of supranational regulations is a burden enough for any multinational business, while each jurisdiction implements its regime with its own unique local twists, creating a maze of localized regulations.
Also, it is universally known that compliance timelines are always tighter given the stipulated dates. Sometimes simple oversights on the part of the employers can threaten to damage reputations and jeopardize operations and therefore, such Organizations like Karma Global make it a point to reach out to employers and establishments struggling with compliance in order to keep pace with them so that staying compliant and in good standing with the Government’s rules, across the entire operational footprints is made simpler and easy by Karma Global Tech Firm.
For global clients facing urgent one-off regulatory challenges – perhaps a major hurdle that puts the global clients in an embarrassing situation, Karma Global Tech Firm has all the capabilities, competencies, and expertise to scale up quickly and easily thanks to a flexible structure and global resource base with international, regional and local hands to deal with any compliance complexities.
For clients facing urgent one-off regulatory challenges – perhaps a major cross-border KYC exercise for a time-critical international deal – we can scale-up quickly and easily thanks to a flexible structure and global resource base.
Proprietary blog of Karma Management Global Tech Firm
This blog has been collated and compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, for its monthly newsletter Issue 05 of November 2022 in case of specific or general information or compliance updates for that matter, kindly reach out to the
Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com