The Court of Justice of the European Union, the highest court in the EU, ruled Tuesday that the member countries must establish detailed methods of tracking the hourly work of employees so that they can be properly compensated for overtime work.
The ruling stems from a challenge by the Federación de Servicios de Comisiones Obreras (CCOO), a Spanish trade union, to the Spanish subsidiary of German bank Deutsche Bank, which the union claimed was illegally failing to pay workers for overtime hours. CCOO alleged that Spain’s timekeeping laws were too lax and did not require detailed recordkeeping of the hours worked by employees, which led to Deutsche Bank underreporting the hours worked by their employees and underpaying them for the overtime they worked. According to the records provided to the court, more than 53 percent of overtime hours worked by Spanish workers were not properly recorded or compensated. CCOO argued that this was contrary to the EU’s overall labor policies and laws and that the court should require stricter reporting laws in the country so that workers were compensated fully for the hours they worked.
The Court of Justice agreed with the challenge by the CCOO, stating that a worker’s right to be fairly compensated for the total number of hours worked is a “fundamental right” under the EU charter and that the member states of the EU must properly enforce it. The court said that an “objective and reliable determination of the number of hours worked each day and each week is essential in order to establish whether the maximum weekly working time—including overtime—and minimum daily and weekly rest periods have been complied with,” and therefore all member states must establish laws that mandate more detailed timekeeping.
The Confederation of German Employers’ Associations, a German trade group of which Deutsche Bank is a member, decried the ruling. In a statement issued Tuesday afternoon, the group said that the court was reacting to “the working world 4.0 with a timekeeping system 1.0,” and that the court’s ruling would reduce the scheduling flexibility that many workers currently enjoy.