Germany: Works Council Must Consent to Time-Keeping via Spreadsheet

​In October of last year, Germany's Federal Labor Court decided that using standard software such as Excel for time-keeping requires the works council's consent. This decision merits analysis, as employers are still coming to terms with its meaning.

European Union employers must inform and consult with their workforces—through employee representatives via works councils or other forums—on employment-related matters such as job security, work organization, and terms and conditions of employment.

Facts of the Case

In this case, the employer and the works council argued whether using Excel spreadsheets to record employees' attendance, which previously had been recorded manually in writing, is subject to the works council's co-determination right, or the right for workers to have a role in a company's decision-making. If a co-determination right is given, the employer has to obtain the works council's consent if it wants to carry out a measure.

While the works council claimed that using such spreadsheets for time-keeping is subject to its co-determination right and demanded that the employer refrain from engaging in the practice without the council's consent, the employer asserted that no co-determination right was affected by using digital timesheets. According to the employer, such standard software is not subject to a works council's co-determination rights.

Decision

Both the Labor Court Detmold and the State Labor Court Hamm ruled that the employer cannot use Excel spreadsheets for time-keeping without the works council's consent, as that topic is subject to the works council's co-determination right. The Federal Labor Court upheld those decisions and confirmed that using such spreadsheets for time-keeping is subject to the works council's co-determination right according to Section 87 (1) No. 6 of the Works Council Constitution Act.

According to this section, using technical devices that monitor workers' behavior or performance is subject to the works council's co-determination right, the Federal Labor Court determined. The co-determination right kicks in when an employer uses data-processing systems that—even theoretically—allow it to collect and record individual behavior or performance-related data, whether or not the employer evaluates or uses such data.

Moreover, the works council's consent must be sought for using standard software such as Excel if such software allows functions that may be used for monitoring, like calculating hours. The co-determination right applies in such situations to protect employees from impairments of their personal rights when technical devices create the risk that employees are being subjected to a surveillance technique that anonymously collects, stores, links and makes visible personal or performance-related information. As long as a technical device allows for such monitoring, its implementation is thus subject to the works council's consent, the Federal Labor Court ruled.

[SHRM members-only toolkit: Introduction to the Global Human Resources Discipline]

Professional Pointer: Works councils in Germany have extensive co-determination rights for any type of software as long as it relates to employees' behavior or performance. Employers that intend to implement software, online accounts or technical devices must involve the works council in advance, especially if those products can potentially collect or evaluate personal data. Otherwise, employers risk a court order barring operational processes like digital time-keeping.

Jan-Ove Becker and Dagmar Lessnau are attorneys with Littler in Hamburg, Germany. Both are members of the firm's international employment law practice.