Situational Details
The applicant works council and the employers, who operate a full-time residential facility as a joint venture, reached an agreement on working hours in 2018. Simultaneously, they drafted a company agreement regarding punctuality, but no agreement was achieved.
In response to a request from the works council, the labor court established an arbitration committee on the topic of “Works Agreement for the Introduction and Application of Electronic Timekeeping.”
After the employers protested to the works council’s right of initiative, it launched the present decision procedure. It seeks recognition as possessing the initiative to implement an electronic time tracking system.
The Higher Labour Court granted the plea of the works council. Now, the Federal Labour Court has upheld the employer’s legal appeal against this ruling.
Grounds
87 German Works Fundamental Law
Participation rights
(1) The works council has the power of co-determination on the following topics, to the extent that they are not required by law or collective agreement: […]
German Law No. 3 on Occupational Safety and Health
fundamental responsibility of employers
(1) The employer is obligated to implement the required occupational safety and health measures, taking into consideration the circumstances, to impact the safety and health of workers on the job. He will assess the efficacy of these measures and, if necessary, adapt them to changing conditions. In doing so, he intends to enhance the safety and health protection of workers.
(2) The employer shall, in developing and implementing the measures referred to in paragraph (1), consider the nature of the activities and the number of workers.
ensure a suitable organization and supply the required resources, and […]
In accordance with 87 par. In accordance with Section 1 of the German Works Constitution Act, the works council may only co-determine in social matters in the absence of a legal duty or collectively decided rule.
§ 3 para. 2 Nr. 1 of the German Occupational Safety and Health Act shall be read in accordance with European law, with the conclusion that the text itself indicates an employer’s legal need to record the working hours of his employees.
This eliminates the works council’s initiative to create a timekeeping system.
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Legal Assessment
The decision of the Federal Labor Court is unexpected.
While the lower courts only differed on the meaning of 87 para. 3, the Supreme Court of the United States reached a consensus on the matter. 1 BetrVG, and if this statute develops into a right of initiative for the works council, the Federal Labour Court has now determined that there is no such right due to the existence of a legislative regulation governing timekeeping. This requirement is derived from the interpretation based on European Union law.
Thus, the employers prevailed on the subject of the works council’s motion. The result, however, is that the recording of working time must be done in accordance with legislative requirements. Therefore, it is not negotiable between the works council and the employer.
The Federal Labour Court so outpaces the lawmaker, who has been inactive regarding the implementation of the Union law legislation up to this point.
It remains unclear when and how the decision will be implemented. Political voices applaud the Federal Labour Court’s judgment and ask for its rapid implementation. The Federal Ministry of Labor and Social Affairs wishes to await the expected November justification of the judgement.
Practical Significance
All of our international clients who are headquartered in Germany or maintain a branch office there will be affected by this verdict. Currently, it is reasonable to expect that all employers will be affected.
In effect, this means that all companies must now record the working hours of their employees in a methodical manner.
Currently, the Occupational Safety and Health Act does not specify a particular method of time recording; time sheets sufficed. However, the ruling, which is based on the case law of the European Court of Justice, provides for a system comparable to an attendance clock that is both understandable and tamper-proof. Using electronic terminals, for instance, employees can log in and out using a chip or fingerprint.
Even after a legislative reform, flexible working time options such as trust-based working time and home office should remain possible.
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