Germany: The coalition agreement and working hours – what should we do?

There is a lot of uncertainty following the ECJ decision 2019 (case no.: C-55/18) and the Federal Labour Employment Court (BAG) decision (case no.: 1 ABR 22/21) in 2022 on recording working hours. This was followed by the legislator's attempt to revise the Working Hours Act. However, the corresponding draft never left the cabinet. The publication of the coalition agreement of our new government has now opened up another chapter.

Current legal situation

The current legal situation is clear. The Working Hours Act (ArbZG) applies: sec 16 para 2 ArbZG does not oblige the employer to keep a complete track record of working hours. The employer only has to record any working time in excess of the eight-hour working day and any working time on Sundays and public holidays. Furthermore, it must be evident over a period of six months that the average weekly working time of 48 hours is adhered to.

The decisions of the ECJ and BAG have an inter partes effect between the parties to the legal dispute. The decisions therefore do not claim any general validity for other companies or the general public.

In its decision, the BAG interpreted the German Occupational Health and Safety Act (ArbSchG) as follows: according to sec 3 para 2 lit 1 ArbSchG, the employer is obliged to introduce a system to record the hours worked by the employee. Neither the ECJ nor the BAG provide for an electronic recording obligation or the recording of breaks in their decisions. The start and end of working hours must be recorded. It must also be possible to determine whether the eleven-hour rest break has been observed.

We therefore generally assume that the Working Hours Act can be relied upon. However, in the event of an inspection by the competent authorities – usually the supervisory trade office – the latter can issue administrative acts and provide these with specific requirements and then also impose penalties. In case of doubt, sec 130 Administrative Offences Act (OWiG) also applies here. Under this provision, companies that fail to take supervisory measures are penalised.

The current coalition agreement is brief on this topic and only contains a few less detailed formulations. The Working Hours Act is to be amended, according to which weekly working hours are to be permitted instead of the daily maximum and bonuses for overtime are to be tax-free in future. Trust-based working hours are to remain possible, taking into account the requirements of the Working Time Directive.

For some time now, many works councils, workforces and employers work to establish a legally secure ruling for their workforce.

Recommendations

Our recommendation: as long as no clarity is created, existing regulations should be retained. A new government could prioritise the issue of working time. What course of action is recommended if there is a lack of existing regulations, if the existing regulations are clearly not fit for the future, or if both the company parties and the workforce are seeking an immediate solution?

The introduction of a pilot phase always proves to be a strategically smart approach to testing concepts in practice and evaluating their effectiveness under real conditions. A time-limited test period enables all those involved to gain valuable experience, identify potential weaknesses at an early stage and also make any necessary adjustments, provided that the legislator acts promptly. The knowledge gained from the pilot phase will ultimately form a solid basis for decisions on how to proceed.

Alternatively, the implementation of an agile works agreement is an option, in which a basic framework is initially established that can be successively expanded and refined with specific components. This form enables the company parties to proceed step by step and in line with requirements, while at the same time ensuring the necessary legal certainty.

Despite all the flexibility in the design process, the following principles should be taken into account:

• 11 hours of uninterrupted rest between the end of work and the start of work
• Average 48 hours per week, peak maximum 60 hours
• Trust-based working hours should remain possible. The exact requirements in the future are unclear. A right of choice for employees is recommended here.

The current legal situation already requires a certain form of working time documentation. The relevant provisions in sec 16 para 2 and sec 22 lit 9 ArbZG leave no room for interpretation in this respect. These records must be designed in such a way that supervisory authorities can verify beyond doubt during inspections whether the legal requirements are being complied with. This applies in particular to compliance with the maximum average weekly working time of 48 hours within a six-month period, the guarantee of the prescribed rest period of eleven hours, and compliance with the daily working time limit of a maximum of ten hours.

The actual determination of working hours can already be carried out using data from electronic work equipment. The focus of current regulatory requirements is therefore on establishing suitable working time frameworks, defining binding attendance times where necessary and – of particular importance – specifying the authority of superiors to set specific working time and location parameters as part of their right to issue instructions. It is essential to design legally permissible compensation mechanisms for overtime worked.

There is also a need to regulate how to deal with discrepancies between the working hours agreed in the employment contract or collective agreement and the additional or reduced working hours actually worked, taking into account the legal framework. This includes, in particular, the remuneration-relevant consequences of deviations in working hours as well as specific regulations for business trips, company vacations, the commute to work – especially from the home office and from the workstation – both with regard to their time assessment and with regard to the routes from the mobile workplace or from the teleworking location to the company or work location.

Conclusion

The existing legal framework, consisting of the EU Directive and the provisions of the ArbZG, currently provides a basis for the development of company-specific working time models if there is a corresponding need for regulation. Nevertheless, it can be assumed that such agreements – in particular trust-based working time, requirements for time recording and weekly working time specifications – will have to be adapted once a new legal regulation comes into force.

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