News Update Employment & Pensions

In 2019, the Court of Justice of the European Union (“CJEU”) ruled that employers are required to record the number of hours that their employees work.

That judgment was rendered in response to a request for a preliminary ruling filed in a case that a Spanish trade union had brought against Deutsche Bank. One of the Spanish trade union’s claims was that, by Spanish law, Deutsche Bank was required to set up a system for recording the number of hours that its employees worked each day to verify the bank’s compliance with the stipulated working times.

The CJEU held that the right of every employee to a limitation of maximum working hours and to daily and weekly rest periods, as laid down in Article 31(2) of the Charter, is a particularly important rule of EU social law that is the minimum standard for all employees to protect their health and safety.

To secure that right, the Working Time Directive contains rules for maximum weekly working times and minimum rest periods. However, the Working Time Directive itself does not impose a requirement to record those working times and rest periods.

To protect the rights ensuing from the Charter and the Working Time Directive, the CJEU ruled that employers must record the time that each employee works each day, using an objective, reliable and accessible time-recording system. The CJEU also ruled that a requirement to only record overtime is insufficient, holding that employers must also have a time-recording system in place for employees whose work patterns do not vary. With the exception of the transport sector and the mining industry, no prescribed form exists for recording working time and rest periods the CJEU announced that the recording system must be accessible for the employees, who would otherwise be unable to verify their employer’s compliance with its legal obligations under the Charter and the Working Time Directive or to enforce their rights under the Charter and the Directive.

Under Article 4:3(1) of the Dutch Working Hours Act (Arbeidstijdenwet), employers in the Netherlands are required to keep proper records of their employees’ working times and rest periods – meaning the actual hours worked and the actual periods of rest. An exception exists for employees who earn at least three times statutory minimum wage. This exception, which is laid down in Article 2:1:1(1)(a) of the Dutch Working Hours Decree (Arbeidstijdenbesluit), is based on Article 17 of the Working Time Directive. Member States may decide for themselves whether they wish to deviate from the recording requirement in situations when, due to the specific characteristics of the activity performed, the duration of the working time is not measured and/or predetermined, and in particular if it concerns managing executives or other persons with autonomous decision-taking powers. In light of the CJEU’s judgment, the question arises of whether this exception is compatible with EU laws and regulations.

The Court of Appeal of Amsterdam was recently confronted with this issue. In its interim judgment of 16 November 2021, the Court of Appeal of Amsterdam held that the exception's purpose contained in that provision was evidently “to express that employees who earn at least three times statutory minimum wage have autonomous decision-taking powers with regard to their working time, or that their activities, because of the specific characteristics, are not measured or predetermined” (paragraph 3.5.7). Since it is uncertain whether it may be assumed that, if a employee earns at least three times minimum wage, the number of hours that they work cannot by definition be measured or be determined by the employee, or that they by definition work in a management executive role or a role with decision-taking powers, the Court needed to consider whether the employee in question had autonomous decision-taking powers concerning the number of working hours worked or whether the activities could not be measured or predetermined on account of their specific characteristics. The parties had not made any explicit statements on that topic, and the Court has stayed the proceedings and the parties are now given the opportunity to do so. If the Court rules that the employee in question falls within the scope of the protective provisions of the Working Time Directive (and therefore the exception does not apply), the employer must record the employee’s working time and rest periods as described above, even if the employee earns more than three times the minimum wage.

In itself, the recording requirement indicated by the CJEU is not new, and it has also been implemented in Dutch employment law. Nevertheless, it is debatable whether the general exception for employees who earn at least three times minimum wage, is permitted; employers in the Netherlands frequently assume that it is. The opposite conclusion will lead to a substantial increase in the administrative burden for employers and also employees, who will then need to start recording the number of hours that they work.

Given that the pandemic is still forcing many employees to work from home (at least part of the time), and that this is expected to continue, it is important to note that this requirement also applies when the activities are performed from home. On a related note, the requirement to record working time and rest periods may also apply to self-employed employees: under Article 2:7 of the Working Hours Act, that Act (modified accordingly) may be declared applicable (including the requirement to keep proper records imposed under Article 4:3(1)) where this is necessary to prevent serious danger to the health and safety of other persons, e.g. platform employees.