The European Court of Justice (ECJ) ruled on 14 May in Federacion de Servicios de Comisiones Obreras v Deutsche Bank SAE, which called into question the validity of member states’ implementation of the European Union’s Working Time Directive (the Directive). The decision raises serious doubts as to the United Kingdom’s own compliance with the Directive.
Spanish trade union Federacion de Servicios de Comisiones Obreras brought a group action against Deutsche Bank SAE, seeking confirmation that the bank had an obligation to implement a system which recorded employees’ daily working hours. The bank’s current practice was to only record holiday and sick leave absences. Employees’ actual hours worked on a particular day were not recorded. The Spanish National High Court sought guidance from the ECJ regarding the obligations imposed by Article 31(2) of the EU Charter of Fundamental Rights (the Charter) and the Directive.
The ECJ held that European law did require employers to put in place a system for recording the actual number of daily hours worked for full-time workers who have not expressly agreed, individually or collectively, to work overtime.
In its judgment, the ECJ noted the importance of the fundamental right of every worker to a limitation on the maximum number of working hours and to daily and weekly rest periods. These rights are enshrined in the Charter and specifically provided for under the Directive. Furthermore, Member States have an obligation to ensure that workers benefit from the rights that are conferred on them. The ECJ emphasised that a worker is the weaker party in the employment relationship, and as such it is necessary to prevent the employer from being in a position to impose a restriction on the worker’s rights.
The ECJ stated that it was essential to have an objective and reliable determination of a workers daily and weekly hours to establish compliance with EU law. A national law which does not provide for an obligation to have recourse to an instrument that enables that determination does not guarantee the effectiveness of workers’ rights conferred by EU law, since both workers and employers are deprived of the ability to verify compliance with those rights. Consequently, in order to ensure the effectiveness of the rights provided for by EU law, member states must require employers to set up an objective, reliable, and accessible system enabling daily working hours to be measured for each worker.
Employers in the United Kingdom should take note of the ECJ’s decision. In the United Kingdom, Regulation 9 of the Working Time Regulations 1998 (the Regulations) which are based on the Directive requires employers to keep “adequate records” demonstrating that (i) each worker’s hours (including overtime) do not exceed 48 hours per week on average (unless the worker has signed an opt-out agreement); and (ii) restrictions on night-time working hours have been complied with.
However, employers in the United Kingdom are not currently specifically required by law to record the daily number of hours worked by each worker. Equally, employers are not required to keep a record of rest periods or breaks taken or forgone. Consequently, the Regulations as currently in force do not comply with the ECJ’s interpretation of the obligations imposed under the Charter and the Directive.
UK courts have the discretion to make a further referral to the ECJ to seek its guidance in respect of the Regulations; however, on the face of it the recent decision of the ECJ appears to clearly cast doubt on the compatibility of the Regulations with the Directive. Accordingly, UK courts may disapply Regulation 9 or seek to interpret it in a way that is consistent with the ECJ’s decision.
While in theory the United Kingdom could amend the Regulations to comply with the ECJ’s interpretation of the Directive, this is not required in order for individuals to enforce their rights as articulated by the ECJ. Furthermore, whether the United Kingdom is likely to amend the Regulations depends in part on whether it proceeds with current plans to withdraw from membership of the European Union, and the precise terms of any such withdrawal agreement. Notably, throughout the Brexit negotiations both sides have stated that they will not reduce workers’ rights as a result of Brexit.
In this environment of uncertainty, it may be prudent for UK employers who do not already do so to implement a system that records the daily and weekly hours worked by each worker to ensure compliance with the Directive. UK employers should take these steps even if all or a majority of their workers have signed an individual opt-out agreement. This is because the opt-out applies only in respect of the 48-hour working week limitation and not in relation to an employer’s obligations in respect of rest periods and breaks.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
London
Matthew Howse
Jessica Rogers