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Federal Labor Court on the Burden of Proof for Overtime Pay - Are Employers Obligated to Record Working Hours?

May 2022 · Estimated read time: mins

Auswirkungen der EuGH-Rechtsprechung für die Rechtslage in Deutschland

Following the groundbreaking working time decision of the ECJ in 2019 (Federación de Servicios de Comisiones Obreras [CCOO] / Deutsche Bank SAE), the Federal Labor Court now addressed for the first time the question of whether employers are obliged (contrary to German law) to comprehensively record the working time of their employees in connection with the burden of proof in legal disputes regarding overtime pay.

 

What is the next step with a possible obligation to record working time? Is the agreement of trust-based working time still possible? These questions have preoccupied companies since the CCOO ruling of the ECJ in 2019. In this ruling, the ECJ had interpreted the Working Time Directive to the effect that member states must oblige employers to set up a system with which the daily working time worked by all employees can be measured in order to ensure actual compliance with the maximum weekly working time and the daily and weekly minimum rest periods. On May 4, 2022 (Case No. 5 AZR 359/21), the German Federal Labor Court (Bundesarbeitsgericht - BAG) for the first time dealt with the effects of the ECJ case law on the legal situation in Germany.

 

Current situation Germany

The Working Time Directive also forms the basis of the German Working Time Act. However, German law does not provide for a comprehensive obligation to record working time. To date, statutory recording obligations only exist for working time that exceeds eight hours per day and, for example, for activities that are subject to minimum wage requirements and in the area of temporary employment. No adjustment was made as a result of the ECJ ruling. In its coalition agreement, however, the "traffic light" government has made it clear that the ruling is to be implemented by law in Germany. At the same time, however, the option of agreeing on trust-based working time is to be retained. However, one of the key elements of such trust-based working time agreements is that no time recording takes place.

 

In the meantime, various courts in Germany have ruled on the significance of the ECJ case law in the interpretation of the German Working Time Act. The results were very diverging: The Emden Labor Court ruled that employers are obligated to comprehensively record working hours (Case No. 2 Ca 144/20). If this obligation is not fulfilled, the burden of proof is reversed in overtime proceedings and employers cannot plead that certain working hours were not worked without further evidence. The Lower Saxony Regional Labor Court (LAG), in turn, subsequently considered the ECJ ruling to be irrelevant because it lacked the relevant regulatory authority and no adjustments had yet been made to German law (Case No. 5 Sa 1292/20).

 

The BAG ruling

The ruling of the BAG also deals with the question of the burden of proof for overtime pay. The defendant employer had set up a technical system for recording working time, with which the employees record the beginning and end of their daily working time. However, the system does not allow employees to record break times. The plaintiff therefore claimed overtime pay on the following grounds: he had worked the entire time and had not taken any breaks. He had not been instructed to do so. The nature of the work was such that breaks were not possible. The defendant, on the other hand, was of the opinion that the plaintiff had not worked overtime. He had been instructed to take breaks and had taken them. The technical record did not document his working hours in a decisive manner.

 

The Federal Labor Court rejected the plaintiff's appeal. The press release of the Federal Labor Court, which is the only one available to date, states that the principles developed by the Federal Labor Court on the distribution of the burden of proof for the performance of overtime by employees and its initiation by employers is not changed by the obligation to introduce a system for measuring the daily working time performed by employees, which is based on EU law. Accordingly, in order to substantiate a claim for compensation for overtime worked, employees must first show that work was performed to an extent exceeding normal working hours or that they were prepared to do so on the basis of instructions from the employer. Employers are only obliged to pay remuneration for overtime hours worked at their instigation. Therefore, employees must also show that the employer expressly or impliedly ordered, tolerated or subsequently approved the overtime worked.

Conclusion:
The good news is that further formal requirements for the recording of working hours in Germany are not yet in sight. Employers can breathe a sigh of relief for the time being. 

 

The ECJ's decision in 2019 was widely reported at the time and was often interpreted to mean that all working time must now be recorded in Germany as well. The German courts then looked at it from a different angle and discussed this issue in the context of legal disputes on overtime.  

 

The Federal Labor Court adheres to its previous case law and denies the discussed effects of the ECJ ruling. For the time being, therefore, the status quo remains that in Germany there is neither a direct legal obligation to record working hours in general, nor an indirect one with regard to the burden of presentation and proof in overtime litigation.

 

So far, only the press release has been published. It therefore remains to see whether the full reasons for the decision contain further indications with regard to the requirements for recording working time and whether this may even result in instructions for action for the German legislature. 

 

In a decision from 2003 (1 ABR 13/02), the Federal Labor Court ruled that employers must enable works councils to check compliance with the Working Hours Act. The issue of working time recording could therefore become topical once again via this route. 

 

Companies should therefore prepare themselves for the issue of working time recording and review their own scope for action in good time. Ultimately, the issue of working hours should also be seen in the context of the increasingly important topic of mental health in the workplace and can therefore also be incorporated into corresponding initiatives by employers. Of course, we continue to monitor how the legal framework is changing.

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