COMMENTARY FROM ARTHUR BRAUN | The Court of Justice of the European Union recently published a decision in proceedings on a preliminary issue, stating that EU member states must require employers to record all employee working hours (C-55/18). This case involved a suit filed by a Spanish union organization in the banking industry, not exactly the traditional players in unions fighting against exploitation of the working classes. This decision did not receive wide publicity in the Czech Republic, but in Germany and elsewhere in Europe it did.
In these countries employers were only required to record overtime. In Germany, for instance, there was no general requirement to record working hours (with the exception of certain specific industries like construction or hospitality).
Modern businesses often operated on the principle of trust: the employer trusts that the employee actually worked the contractually stipulated 39 or 40 hours. In start-ups and new economy companies – if they have employees at all – time clocks and recording exact overtime hours are completely unrealistic.
Critics view this decision as a step backward for the digital working world, entirely impractical for the modern flexible working hours and work-at-home models. Who spends exactly eight hours working on a big project and just logs off and goes home?
And how many employers accept a certain amount of taking care of personal matters during work hours, but expect that work will be completed and the employee will not record every fifteen minutes in the office or on email at home as overtime?
In the opinion of the Court of Justice and Advocate General, however, this is the only way to guarantee employee health protection (the goal of Directive 2003/88/EC concerning certain aspects of the organisation of working time as well as the EU Charter of Fundamental Rights) and adherence to the required rest periods.
The Czech Ministry of Labor and Social Affairs has not yet responded to the ECJ decision with new legislation, which may be because Czech legislation already requires employers to keep transparent records of shifts worked including overtime (Section 96 of the Labor Code). Breach of this obligation is subject to a fine.
What then does this mean for Czech companies going forward? In the short term, nothing major. Every employer required to set working hours for its employees must have a system for keeping records of shifts worked (e.g. a software program). The tools used to track shifts worked may not be used for purposes beyond the primary purpose such as for unauthorized monitoring of employees.
So take care! Many software tools on the market today do not meet the requirements of the GDPR or Labor Act. Some monitor employee behavior in an unauthorized manner (although not all monitoring is unauthorized!) and intrude on their privacy or process their personal data without sufficient data security, e.g. in non-EU member states without taking the necessary technical and organizational measures.
Although the decision was supposed to protect employees and make their position easier, it would also be appropriate to consider its impact on employers. How can employers eliminate or minimize the risk of disputes on up to three years of retroactive overtime pay (especially if the employees leaves the company on bad terms)? Employers would be well advised to include overtime of up to 150 hours per year in the salary for regular employees. However, this is only possible if the salary is agreed; it does not work in situations where the employer sets the salary unilaterally such as with a salary assessment. Employers who set salaries unilaterally or cannot or do not wish to include overtime in the salary should clearly state the rules for overtime work. This is more about covering yourself than a real solution, but it is still more constructive than switching off the company server at 6 pm.
Does this ruling even fit in today’s work culture? Most of us are not leaving the factory at 5:30 and stamping a timecard at the door. Distinctions between work and free time are blurring, and work is no longer performed at a strictly defined location under direct supervision.
Moreover, I find the ruling somewhat ironic. Many of the top lawyers I know have become judges. One of their biggest reasons for doing so was the flexible working hours. They work (just like ECJ judges) 40 or more hours a week, but the focus is on results – number of cases resolved. They spend a minimum amount of time actually in the court building, basically going in only for meetings and administrative activities. And yet they are the ones trying to impose more bureaucracy and inspections on the rest of the working world, leading to less efficiency overall?
One can only hope that, until the digital revolution has completely replaced the old rules with new principles for work, the supervisory authorities performing inspections will be able to take into consideration the differences between fields. Black sheep certainly exist, but today’s world is too diverse to apply 20th century rules across the board for all employers. The day-to-day work environment should definitely make room for flexibility. And that applies to employers as well as employees.