Works Council’s Right of Initiative in the Structuring of Working Time Recording

Following the fundamental decision of the German Federal Labor Court (Bundesarbeitsgericht, BAG) on September 13, 2022 – 1 ABR 22/21 on the obligation of employers to record working time (we reported), questions of practical relevance remain open, particularly with regard to the design of working time recording in companies with works councils.

While the Federal Labor Court previously rejected the Works Council’s right of initiative in introducing a time recording system, it already indicated the Works Council’s right to co-determination in the specific design of the time recording system.

In its decision of May 22, 2023 – 4 TaBV 24/23, the Munich Regional Labor Court (LAG) has now addressed the question of the Works Council’s right of co-determination in the design of the working time recording system.

Background of the Decision:

The local Works Council demanded that the employer enter into negotiations on the method of recording the working hours of the field staff employed in the company. So far, a group works agreement on time recording via SAP had only existed for employees in the office. The employer refused negotiations, citing the impending legal regulations and the planned collective agreement opening. Additionally, the employer referred the Works Council to the fact that they had already decided on an electronic working hours recording system, which falls under the jurisdiction of the group works council.

The Higher Regional Labor Court of Munich initially appointed a conciliation board upon the Works Council’s request. It was not immediately obvious that this board was not responsible, considering the aforementioned decision by the Federal Labor Court. In this case, the issue was not about the “if” but the “how” of time recording, for which the Works Council has co-determination rights.

The Higher Regional Labor Court of Munich dismissed the employer’s subsequent complaint. The Court reasoned that the employer could not evade the Works Council’s right of initiative by claiming that they need to consider whether they want to act lawfully and fulfill their legal obligation to introduce a time recording system. Similarly, it is inadmissible to make a decision about the type of time recording in advance, as this decision requires the co-determination of the group works council. The Higher Regional Labor Court of Munich emphasized once again that questions regarding the design of time recording typically fall within the co-determination rights of the local Works Council.

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