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Freshfields TQ

Technology quotient - the ability of an individual, team or organization to harness the power of technology

| 4 minutes read

Back to the punch clock?

The European Court of Justice issued an important decision on working time recording last week (C-55/18 - Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAEpress release and full decision) which has attracted broad press coverage internationally and caused concerns amongst employers. 

As often happens at second glance, most things are far more nuanced than just black or white.

The initial case was brought by Spain’s largest trade union (CCOO) which sought to have a Spanish subsidiary of Deutsche Bank obliged to set up a system for recording how long its members worked each day, including overtime, so that it could verify that these complied with their stipulated working conditions. According to data provided by the local court that referred the case to the ECJ, more than half (53.7%) of Spanish employees' overtime was not recorded. Consequently, (previous) Spanish legislation not requiring employers to set up a system enabling working time registration was deemed unable to ensure effective compliance with obligations of European legislation on working time and workers’ health and safety.

The ECJ ruled that in order to guarantee employees' rights under the EU Working Time Directive and the Charter of Fundamental Rights, Member States "must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured."  This is to ensure employees are not working in excess of 48 hours per week and taking adequate rest breaks, as provided for by the Directive.However, the ruling allows for some flexibility by stating that it is up to the Member States to determine the “specific arrangements for implementing such a system, taking into account of the specificities of each sector and factors (as companies’ size) as applicable”. 

As modern-day working hours are nowadays less clearly defined and often trust-based (think about agile working, teleworking and other new ways of working), the decision could have far-reaching consequences, in particular on European operations of global employers. While European trade unions welcomed the ruling, the Confederation of German Employers’ Associations criticised the move as backwards and others complained it would cause bureaucratic additional expenditure without really contributing to industrial safety.

It is interesting to compare the outcome of this ECJ decision with the European Commission’s overall supportive approach to digital transformation, including when it comes to working time (2017 Interpretative Communication concerning certain aspects of the organisation of working time - Legal guidance). Digitalisation leads to increased fragmentation of work, both in time and location. In a changing world of work where flexible arrangements are no longer the exception, it is essential to reconcile the aspiration for more flexibility with the protection of workers from health and safety risks - as noted by the Commission. While it’s true that the combination of digital tools and flexible working arrangements offers significant advantages to work-life balance, at the same time it may entail dangers such as the impossibility to properly “disconnect” and consequent health impacts due to the increasingly blurred lines between home and work.  For this reason, some EU countries have introduced (and more are considering to introduce) a “right to disconnect”, namely the right to refuse to answer emails, phone calls or to be otherwise available outside of business hours. 

Interestingly, the same digital technology which allows for more flexible working arrangements is opening the way to new tools and possibilities of monitoring working time, eg through smartphones, using apps and people analytics tools. Advanced technology to document working hours is already available and some employers know exactly when (and where) workers are active, so there is certainly no need to go back to punch clocks! 

Ultimately, a balance will need to be struck between the need for more flexibility on both sides (employers and employees) and compliance, as well as health and safety for all workers. The decision will undoubtedly trigger interesting (and potentially lengthy) discussions at Member State level. 

While assessing the impact of this decision, Member States will also have to take into account compliance with increased employee privacy under GDPR when trying to find the necessary practical solutions to record working time in a manner compliant with the ECJ interpretation of the directive. In addition, it needs to be taken into account that monitoring the working time of employees is subject to participation rights for works council in several Member States (for example in Germany).

Very timely, a new Spanish legislation (Royal Decree-Law 8/2019) just came into force this week, making time recording mandatory on a daily basis so as to increase legal certainty and facilitate supervision by employees’ representatives and the Labour and Social Security Inspectorate. Sanctions for non-compliance with the working time record include fines up to EUR6,250. 

What’s next:

  • The ECJ’s decision is sent back to the initiating Spanish court, which has responsibility for applying the ruling to the case before it, and is binding also for other national courts before which the same problem is raised, so as to ensure equal application of EU law across the EU.
  • Member States’ authorities are obliged to interpret national law in a manner that is consistent with ECJ case law. However, it is not expected that the ruling of the ECJ will lead to a direct and immediate obligation for employers to act. Rather, the Member States are obliged to implement the judgment, with discretionary powers and the possibility to make use of the exceptions provided for in the directive. It therefore remains to be seen how quickly the national legislators will take action and what the exact requirements for recording working time will be.
  • The decision may revive the plans for a revision of the 2003 Working Time Directive (2003/88/EC). The discussions stopped in 2017 (hence the interpretative communication by the Commission referred to above), but we will soon have a new EU Parliament and a new EU Commission so the talks may resume.

In the meantime, we recommend to take this development as an opportunity to check internal processes ahead of possible new regulations introduced locally and/or potential claims by workers or labour authorities (which could prove costly!). Working time recording may also be raised by works councils and/or trade unions as a discussion/negotiation topic, so employers should take a look at existing collective bargaining agreements and employee hand books just in case.


europe, intellectual property