BAG decision on working time recording: Back to the time clock?
> January 2023

According to a recent Federal Labor Court (BAG) decision dated September 13, 2022 (1 ABR 22/21), employers are required to record working hours.

The primary issue in the resolution mentioned above was whether works councils have a right of initiative under the Works Constitution Act (Betriebsverfassungsgesetz - BetrVG) to introduce and enforce works agreements on the introduction and use of electronic time recording. In the end, the answer to this question took a back seat.
The BAG has stated that a works council's right of co-determination in social matters (this includes the question mentioned above regarding the right of initiative in the recording of working hours) can only exist at all if there is no statutory or collectively agreed regulation (Sec. 87 (1) BetrVG).

However, in the opinion of the BAG, such a statutory regulation already exists. If Section 3 (2) No. 1 ArbSchG is interpreted by EU law, the employer is already legally obligated to record the employees' working hours. This would eliminate the works council's right of co-determination.  

The consequences of this decision are far-reaching. For experts, the decision is a drumbeat. It is true that the EuGH (ECJ) ruling on the recording of working hours in May 2019, according to which companies in the EU will have to record all working hours of their employees in the future, was a warning. However, everyone across industries and associations expected that this European case law would be fine-tuned by the German legislature, for example, concerning trust-based working time or mobile working, and would be incorporated into national law.

However, Germany's highest labor court has pre-empted the legislature with a decision that applies to all employers. At any rate, avoiding this decision will not be possible until a new legislative direction is taken.

In our opinion, the ruling does not mean the end of trust-based working time, flexible working or working from home. However, the employer will have to record working hours, if necessary, with the help of digital tools for recording working hours, and at least check these records for plausibility.