Recent decisions by the European Court of Justice and the UK Court of Appeal have potentially wide-reaching consequences for employers, requiring them to keep a record of working time and rest periods taken by those who work for them. Our employment team considers the impact of these judgments.
European Court of Justice ruling
The European Court of Justice (ECJ) has considered the extent to which employers are required to have a system in place to measure the time worked by their workers. The case was brought by Spanish trade unions against Deutsche Bank, with the trade unions seeking a declaration that the bank needed to set up a system recording the actual number of hours (including overtime) worked each day by its workers. The bank argued that Spanish law did not require this, as long as overtime hours were recorded.
The ECJ ruled that, to ensure rights held within the Working Time Directive (WTD) and the Charter of Fundamental Rights are given effect, member states must introduce an “objective, reliable and accessible system” to measure the time worked each day by each worker – a potentially significant burden for employers.
The UK’s implementation of the WTD has been similar to Spain’s: until now, employers have not been specifically required to measure or record daily hours of work or rest periods. All that is required of employers under the UK’s Working Time Regulations (WTR) is to keep and maintain records in relation to the 48-hour limit on average hours worked per week (for workers who have not opted out), and in relation to the limits on night work.
The ECJ’s decision, which is currently binding in the UK, means that the WTR is not compliant with the WTD provisions.
Enforcement of WTD in the UK
The requirement to maintain records under the WTR is not a right that gives an individual employee grounds for action in the employment tribunals or courts. Instead, enforcement of the record-keeping obligation falls to the Health and Safety Executive (HSE) and local environmental health departments, on the basis that the WTD’s primary objective is to protect workers’ health and safety. Failure to keep working time records in relation to the 48-hour weekly limit and night work is an offence, and can result in a criminal fine. As matters stand, however, HSE guidance states there is no requirement to keep specific records of all time worked and rest periods taken, so the extent to which HSE will actually enforce this obligation remains to be seen.
Whether any steps are taken in light of this case will depend on a number of factors, including the UK’s future relationship with the EU. It is not yet known if the UK Government will consider amending the WTR to bring it in line with EU law, or if HSE will update its guidance in this area.
Such an obligation could pose significant practical difficulties for employers in certain sectors. While it is common for some professional services firms to record their time to assist with client billing, and some offices and factories do operate a clocking in and out system, it is relatively uncommon in the UK for employers to record all of the time worked by their workers.
Recent WTR case
Following the publication of the ECJ case, there has been further debate surrounding work-time recording in the Court of Appeal. In Hallett v Derby Hospitals NHS Foundation Trust, the Court of Appeal considered contractual provisions relating to pay and monitoring of working hours and rest breaks by junior doctors.
The evidence showed that in practice monitoring was often inadequate, either due to doctors submitting incomplete information or due to absence. The Trust, in line with standard practice in the NHS, dealt with missing data by supplementing it with ‘expected’ data. Dr Hallett argued that this methodology produced skewed results, causing a breach of contract. The Court of Appeal agreed, finding that the data used for monitoring rest periods (and calculating pay supplements) had to be calculated using actual recorded data for each shift worked, as opposed to the expected data shown on the rota or any artificially produced data. Particularly in a medical context, in which patient and doctor safety is paramount, it was critical for working hours and rest periods to be monitored closely.
The financial impact on the Trust of this ruling is significant. NHS trusts are financially incentivised to comply with working time and rest break requirements, therefore where monitoring shows there has been non-compliance, junior doctors are entitled to a “double time” supplement. In this case, the Trust will have to repay doctors around £250,000 for underpayments over an eight-month period. However, the cost for the wider NHS has the potential to be even more substantial.
With additional reporting by Emma Davidson.