Time Clocks Everywhere?

On May 14th, the Court of Justice of the European Union (ECJ) delivered a judgment which, in effect, declares that Member States must enact laws that require employers to set up a system enabling the duration of daily working time to be measured. Could this ruling have significant impact across the future of the European Union? What will this mean for employers and employees alike?

Overtime, Deutche Bank, and the case before the ECJ

The case was brought to the ECJ by the Audiencia Nacional (Spanish National High Court) who were seeking clarification as to whether or not the existing Spanish National law on working time satisfies the requirements of both the European Working Time Directive and the Charter of Fundamental Rights of the European Union.

The ruling was a result of the Audiencia Nacional hearing a case against Deutche Bank brought by a Spanish trade union, which sought a judgment that the employer was under an obligation to set up a system that records its employees’ daily working hours. The union believed that such a system was necessary in order to provide overtime information to the union (as required by Spanish law) as well as to verify compliance with working time regulations.

Deutsche Bank argued that the existing Spanish law does not require tracking of all hours worked, only overtime hours—their position based on case law in the Spanish Supreme Court. Yet the Audiencia Nacional cited that over half of overtime hours worked in Spain are not recorded at all.

Where did the case originate?

The Charter of Fundamental Rights of the European Union (CFR) and the European Working Time Directive (WTD) both make clear that employees have certain rights and protections to ensure fair and just working conditions.

For example, Article 31 of the CFR states:

• Every worker has the right to working conditions which respect his or her health, safety and dignity.
• Every worker has the right to limitation of maximum working hours, to daily and weekly rest periods and to an annual period of paid leave.

Within the European legal framework, a “directive” is a legislative act that outlines a goal which all EU countries must achieve. However, it is up to the individual countries to devise their own laws on how to reach these goals—guaranteeing a level of interpretation and variation of detail in each country’s laws.

The Judgment

Simply put, the court ruled that national law must require the setting up of “an objective, reliable and accessible system” to record daily working time. What, then, is the significance of this ruling across the EU?

What does this mean for the future of the EU?

At first sight, the impact of the judgment is clear – each Member State must review their national laws and ensure that they include this obligation on employers. However, buried within the judgment is a recognition that when creating national law, Member States have some flexibility to define the specific arrangements for implementing such a system. Namely, there exists some individual control regarding the peculiarities of time tracking that endure within particular professional sectors and within the specific undertakings of those professional fields.

This detail is important in light of the fast-changing nature of work in the 21st century. Flexible working, the gig economy, home working—all enabled by developments in technology – are blurring the definition of ‘working time’. For example: is a knowledge worker responding to an email while waiting at the school gate ‘working’? If so, should that time be tracked? These are the sort of questions that employers can no longer avoid and, while the court made no mention of tracking work hours outside of the workplace, could spur future discussion.

In theory, the technology that enables such flexible working practices could also track activity – but then we run into conflict with regulations around privacy, particularly GDPR.

Whilst Member States will examine their current laws in the light of this judgment, it seems unlikely that there will be any momentous changes in the short term. But employers with workers whose time could be tracked would be well advised to ensure that they do implement systems that are compliant with the judgement to avoid the possibility of litigation.

Though some employers remain wary at the prospect of holding their employees at the mercy of the ancient and outdated punch clock, this judgement could prove beneficial on numerous fronts. Ensuring that employees are not restricted of their rights remains a primary concern, but issues such as payroll inaccuracy, overtime fraud, and attendance accountability could be alleviated as a result.