Increasing emphasis on employer compliance with working time rules

Many areas of employment law are left for national countries to legislate for as they see fit. However, one key area that is often impacted at an EU level is that of working time. Whilst many would view that there are benefits to the business for not overworking employees, at the EU level this is transforming into a fundamental right, particularly since the implementation of EU Directive 2003/88 (the “Working Time Directive”) which outlines key guidance for working time regulations and providing for a standardised maximum of 48 working hours per week.

Whilst this directive is 16 years old, recent case law in Denmark and Europe shows that it is becoming increasingly relevant for companies and employers to examine their internal systems for monitoring and organising working hours. Critically, as the employee is viewed to be the weaker party in the relationship, the onus is on the employer to ensure proper compliance with the working time regulations. Although much of the employment relationship can be determined on the basis of contractual agreement between the parties, working hours are considered to be amongst the certain fundamental rights that cannot be derogated from, alongside matters such as sickness rights and minimum annual leave.

The principle of limited maximum working time has already been emphasised in Denmark with the judgment delivered on 14 November 2017. Here, the Danish Supreme Court awarded an employed tractor driver a DKK 50,000 compensation who regularly exceeded the maximum working hours, despite that the overtime had been at the request of the employee and that he had been properly paid for it. The matter subsequently became relevant when the employment relationship was terminated on bad terms and the employee brought a claim.

It therefore falls to the company to limit its own risks and potential liabilities by ensuring that employees are not working in excess of the average of 48 hours weekly, even where the employee requests this work and is fully compensated.

The employer’s responsibility in this regard also extends to keeping an accurate record of hours worked to ensure that the 48 hours average is not exceeded, as also established in law by the Western High Court’s decision from 23 June 2010. Here, the court found that the employer had been aware of the significant overtime being performed by the employee, even if they were not aware of the exact extent since it was not being recorded. It was also determined here that even though the employer did not explicitly instruct the employee to perform the overtime, it was still the employer’s responsibility to ensure that the working time rules were adhered to. The court further emphasised that it is not enough for an employer to state in the employment contract that overtime is to be expected and has been taken into account when determining the salary, as this provision can only have effect to a reasonable extent.

This responsibility regarding working hours also extends to the organisation of rest breaks for the employee. This was emphasised in a recent judgment on 14 May 2019 for case CCOO vs Deutsche Bank (ECJ C-55/18) from the Court of Justice of the European Union. Here, the ECJ determined that all employers must use a “objective, reliable and accessible” system to record the amount of time worked each day by employees to ensure compliance with the relevant rules. In this case between a Spanish trade union and Deutsche Bank SAE, the Spanish National High Court referred to the ECJ for a decision on how working time was to be monitored, resulting in the determination. Previously in Spain, it had only been necessary for the overtime worked by employees to be monitored.

However, the ECJ has reaffirmed that it is a fundamental right of the worker to have a limited amount of maximum working hours, with minimum daily and weekly rest periods. The “Working Time Directive” provides that, on average every two weeks, workers are entitled to a daily rest period of 11 consecutive hours and a weekly rest period of 24 consecutive hours. Supplementary rules apply to night shift workers. Such measures are considered by the ECJ to be necessary to guarantee workers’ health and safety.

Importantly, the ECJ’s judgment went beyond references to the Working Time Regulation to fundamental EU rights. Whilst the Working Time Regulation leaves some flexibility for the Member States to implement the rules contained within the Regulation at their discretion, in the future the ECJ will probably not permit the EU Member States interpretation room in applying the ECJ’s judgment, and this may soon be considered mandatory for employers in all EU countries.

Therefore, although a possibility exists under the Working Time Directive for Member States to provide for opt outs to enforcing the maximum working time amount of 48 hours, subject to certain additional provisions, and currently used to a limited extent by some Member States, it is most likely that no such opt outs will be possible here. This judgment is therefore expected to have significant effect in all EU countries, although it cannot yet be predicted certainly what the sanctions for violations will entail.

Notably in Denmark, in addition to the Working Time Directive rules enforced by the Working Environment Act are also supplemented with national case law, and in some collective bargaining agreements and can include specific conditions regarding rest periods and additional payments owed to workers.

Given the force of the ECJ’s judgment in this case, in addition to the existing Danish case law, it is possible that the right to a proper work recording system in the workplace may already exist and be enforceable if an employee brings a direct claim on the basis of his or her EU rights. Employers and companies operating in the European Union are thus advised to re-examine their approach to monitoring employees’ working time, taking early steps to implement a comprehensive and well-structured system for time recording and introduce a clear internal policy on overtime.