How do you measure the number of hours worked by employees?

Following a recent ruling by the Court of Justice of the European Union (CJEU), UK employers will now be required to keep a detailed record of time worked by employees, including both normal working hours and overtime.

working late and working time regulations

Federacion de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE

In this case – which was heard by Spain’s high court, the Audiencia Nacional – Spanish trade union CCOO brought legal action against financial organisation Deutsche Bank SAE.

The union argued that the business has an obligation to record the time worked each day by its employees, and that without such a system in place, it would be impossible to determine “objectively and reliably either the number of hours worked by the worker when that work was done”.

They maintained that failing to record this information meant it was impossible to verify whether stipulated working times were being adhered to, and that only by keeping such records could the employer ensure compliance with the Charter of Fundamental Rights of the European Union and the working time directive. This gives EU-based employees the right to at least four weeks’ paid holiday and ensures that they do not work for more than 48 hours over the working week.

Response

In response, Deutsche Bank SAE argued that Spanish law only requires employers to keep a record of employees’ overtime hours, not their normal working hours. However, the Audiencia Nacional ruled that interpreting Spanish law in this way:

  • Risked exploiting employees who may be unaware that they have worked beyond the maximum working limits; and
  • Deprived union representatives the evidence they need to verify that rules are being complied with.

The case was then passed to the CJEU, which released its judgement on 14 May 2019. It stated that EU Charter and working time directives nullify national law on this issue, as without systems in place to record the number of hours worked, when the work was carried out, or the number of overtime hours worked, it is difficult for employees to ensure that their rights, such as minimum daily and weekly rest periods, are being upheld.

Implications for UK employment law

Employers operating in the jurisdiction of EU member states will now have to follow suit. Based on this ruling, UK employers will now be required to implement objective, reliable and accessible systems that will allow them to accurately record the numbers of hours worked by staff – both paid and unpaid. However, the specific arrangements for the new system’s implementation will be left up to individual member states to determine.

Prior to this ruling, UK law (as set out in the Working Time Regulations) required employers to keep ‘adequate’ records to demonstrate compliance with the 48-hour average working work for any workers who haven’t opted out, as well as adherence to limitations surrounding night work

This ruling goes one step further; member states must now require employers to record hours worked each day by each worker, including any overtime hours. Many employers will already be doing this as a matter of course, in which case no changes will be necessary.

As with the itemised pay legislation that came into effect in April, which requires employers to provide a detailed breakdown of workers’ pay, the requirement to track working time in detail is intended to create greater transparency. This should prevent situations where workers are overworked and underpaid. In some cases, if employees are paid a set amount but work variable hours, they may end up earning less than minimum wage.

James Tamm

Director of Legal Services

Expert comment

“This judgment identifies a gap in the UK Working Time Regulations which do not currently contain a provision requiring employers to keep a record of time worked by employees. However, it is still relevant to UK companies as courts and tribunals are required to interpret EU law in line with CJEU decisions. When the UK leaves the EU, even in the event of no deal, this decision will still be relevant as the UK Withdrawal Act maintains the primacy of EU law for decisions relating to pre-exit legislation like the Working Time Regulations.”

Approach with care

“Whilst this case has caused much consternation with employers, it may be a storm in a teacup. As with most things under the Working Time Regulations, save for holiday rights, there appears to be limited recourse for employees when dealing with such a breach. Frankly, the legislation lacks teeth, which is a relief for employers. However, it would be regarded as good commercial practice to keep records of time worked just in case. All employers dealing with hourly-paid workers will no doubt do this already. The position with salaried employees may not be so clear-cut but most employers will track working time in some way already – requiring employees to sign or fob into a workplace, or log onto a computer – so it may be that they need to be reviewed with the data collated and stored as proof of working hours.”

Need support?

Unsure how to go about implementing a working time monitoring system across your organisation? Speak to our experienced Employment Law Advisers for practical advice on keeping your business compliant, plus information on our innovative HR Software, which will allow you to keep on top of your HR responsibilities and manage employee information through one easy-to-use dashboard.

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