On January 29, 2018, when the Spanish union “Comisiones Obreras (CCOO)” filed a lawsuit against the Spanish subsidiary of Deustche Bank at the European Court, a pandora’s box of unknown consequences was being opened. It first impacted Spain and is now hovering over the rest of the Union member states.
We are referring to the Court of Justice of the European Union’s Working Time directive, which makes time tracking at work mandatory for European employees. Like all directives, it leaves ‘’freedom’’ of its implementation to member states*. What happened in Spain could be a lesson for the rest of the countries and all those involved: politicians, legislators, unions, and business people.
At Beebole, we have experienced firsthand the whole evolution of the Working Time directive in Spain: from the first government announcements and the impact in the press, to the final approval of the law and the ensuing rush to get things together. We have seen it firsthand with all the business people and managers bombarding us with all kinds of questions mostly related to understanding the law itself. This points to a major lack of understanding on the issue, and this is due to several things. Let’s break them down.
5 Lessons learned from the EU Working Time Directive in Spain:
1. Timing and communication
The coming of the law was announced as a ‘’probe’’ in December 2018. The bill ended up paralyzed by the opposition. All the momentum in the news about the bill stopped. Due to this impasse, the medium-sized businessperson lost valuable time to get their organization ready at all levels: technological, legal, and human.
So then, it turned out that the government could approve the law by other means to force its approval, such as the Royal Decree-Law in Spain. This happened in March 2019. The decree-law announced that the law would come into effect in two months. The government announced it at a ministerial press conference, with a short publication in the Official State Gazette, BOE. That’s it. That left just two months for an entire business network made up of mainly small and medium-sized businesses to find out what is all about and to start looking for a solution, let alone implement it, which we’ll see next.
If you are reading this article and your business is in the EU, don’t wait for this to happen. Sooner or later it will, but it’s best to be ready for it, because one thing is for sure: Implementing a work time tracking system that matches your company’s needs is a very time-consuming task. And we all know time might not exist for quantum physics, but for physical money it sure does.
Needless to say that when it comes to these kinds of processes -with a broad, overarching impact on organizations-, timely and detailed communication must come from the people who propose them.
2. So, what are we tracking?
Perhaps some of the most repeated questions our support team received during the months following the announcement of the decree-law in Spain were: Do we have to track actual hours or just the length of the workday?, Do we have to track time outside of working hours?…Is pen and paper okay? Of course, these were almost followed up with ‘’How much is it going to cost us?’’. Well, let’s see.
EU Working Time Directive: Freedom or passing the buck?
What the Court of Justice of the EU is announcing is a directive. A directive is like a Russian Matryoshka doll: responsibilities are nested from the top-down. The EU working time directive is a binding regulation but it allows each member state the power and authority to choose how to enforce it and by what means, i.e., the freedom to develop its own internal legislation regarding it.
As for the Spanish case, one could say legislation was like a directive, giving each business the freedom to choose the hows and whats, i.e., the freedom to develop its own ‘’internal legislation’’ regarding time tracking. This, of course, upset the national workers’ unions because they demanded a law that determines on a sectorial basis how to track work time (i.e., catering sector, industrial sector, etc). And this, of course, made business boards happy because each business is a totally different world.
In other European countries, national legislators must choose which path the follow. If they choose to follow the offering up freedom, then good communication, timing, and explanations in practice, will prevent the law from turning into a carte blanche for employees and employers.
3. Every law has its loophole
I don’t mean loopholes in the sense of national crookedness or picaresca when it comes to law enforcement. I am referring to it being a loophole for the very daily management and operations. Spanish law arising from the European Working Time directive indicates that employees must register clock-in and clock-out times, something that is not specified in the EU Working Time Directive per se. It seems fine. But, wait, no.
I’m quoting my colleague and our sales director, Miguel Guardo: ‘’forcing employees to track check-in and check-out times instead of length of workday is a problem for many companies. For those companies with project invoicing, it is always easier to estimate the hours dedicated to a project than to detail the start and end time of each activity. Employees in these companies usually work in several activities throughout the day and being aware of modifying the timesheet in each change is something that nobody does.’’
Let’s imagine another very common scenario. The work schedule says clock-in is at 8am. The employee arrives at 7:50am and clocks in with whatever system is being used, web, app, or clock-in machine: are those 10 minutes computed as overtime?
Working day or working hours?
As far as Spanish legislation is concerned, the work schedule or work calendar cannot be a substitute for time tracking. All employees must track time, an act that reflects each of us effectively inputting our time individually. There are two ways to approach this. Time tracking can be a starting and ending time -as the Spanish law says- or it can be the sum of workday time regarding the ordinary established workday (and all extra is overtime). Choosing one path or the other has its implications.
As we have seen above, clocking-in and out carries with it some major headaches. And when it comes to ‘’simply’’ tracking length of workday, the challenge lies in avoiding timesheets being turned in as is, and employees just get asked to verify them. This is a common situation for those businesses and sectors still using pen and paper. Fortunately, they are not in the majority.
4. Foreseeing the FAQs of the Working Time Directive
As stated above, governmental agencies and their communication channels should anticipate problems that laws like this bring about and explain them BEFORE approval and announcement, and not AFTER, when the law is already in effect (as in Spain). Some common questions Spanish managers asked our support team about the “registro de jornada” were: What tools comply with the law?, What happens to my remote or mobile workers?, Should freelancers/independent contractors track their time?, What can I and can’t I monitor, with the GDPR in mind? Is GPS tracking needed?
5. Encouraging acceptance of the law: “All this for what?”
In Spain, the trigger clearly boiled down to controlling unpaid overtime hours, which, according to the unions, will result in more employment. If we really aren’t going to argue about whether or not this is the case, what I believe is that it’s not the best slogan for acceptance with arms wide open. Yes, of course, it’s true that you don’t accept laws, you follow them. But, if we remember well back to living at home with our parents, that which is willingly accepted is better fulfilled.
Numerous articles from a large number of other time tracking solutions use two types of motivation: Fear and productivity.
Fear is not enough
When it comes to fear, we can hardly forget why: fines and lawsuits for non-compliance. In this sense: is a range of fines spanning from €600 to €6,000, as in Spain, dramatic enough for a determined business to take out its calculator and decide that it’s more affordable to take a risk than to implement a work time tracking solution? Even though the fine can indeed be higher, because lawsuits would follow, with compensation for employees who know and demand their rights.
Focus on being productive or busy
As for productivity, I believe it is a mistake to think that an app for time tracking makes a direct impact on productivity in each one of us. Time tracking can increase presenteeism (which really just means ‘’being a body in a room’’), but resultism depends on other variables.
Being in charge of a marketing team, I can’t gauge productivity in number of hours worked. Effort, results, and dedication is the complex sum of many things we still don’t know the formula for yet. If Science had already made a pill for that, I would’ve already taken it by now.
At Beebole, we’ve wanted to disassociate ourselves as long as we have been able to from the message ‘’time tracked, greater productivity’,’ even though we know that this can be an argument that some businesses need to hear. Nevertheless, we believe that time tracking is the foundation for improving competitiveness for businesses, or else we would not work on offering solutions for work time tracking if we didn’t believe in its benefits. Clients who were already with us before the regulation don’t see themselves obligated, they do it for different reasons spanning from more reliable payroll management to business intelligence.
We think it’s just that. Business intelligence (a more common concept among large enterprises but practically unknown for SMEs). Let’s talk about the issue at hand, like, for example, can a business compete in a sector if it doesn’t know how much real time —and money—it takes to carry out a project? How can it improve future budgeting if it does not know where its teams’ exact time goes?
And from an employee point of view, beyond legal obligation, wouldn’t it be easier in an environment where there is always access to real time spent on a job? How does that translate in terms of bonds and motivation?
Spanish case should help future member states reconsider turning a law into a mere control mechanism, instead of transmitting it as an improvement for competitiveness and work environment. Not doing so is a missed opportunity.
Working Time Directive in Europe: Moving on! Who’s next?
According to Carlos de la Torre, associate counsel at Baker McKenzie, “there is a compliance deficit on part of the EU member states, only Spain, Italy, and Portugal have rules for work time tracking.” In Germany, only overtime is tracked but there is nothing for tracking regular workdays. French’s current law is only for those workers whose work time spent is calculated in hours or days that do not fit in a predetermined workday, and it’s computed monthly. In Austria, employees track time with previous consent of the work council.
It’s clear that Spain is the spearhead for the EU Working Time directive. We still have to see how it develops in the following months (or years) in the other states, to not end up with inequality among countries, because Europe is equal for everyone, is it not? And it will be very interesting to see how each country implements the directive, if there are differences or similarities between them, and what it says about their way of understanding the work environment.
Meanwhile, from Spain, prevention is better than cure. In the Advocate General of the Court of Justice of the EU, Giovanni Pitruzella, we trust.
*Background in detail: The Court of Justice of the EU announces in May 2019 the enforceability of time tracking for all members of the union. This decree responds to the lawsuit filed by Spanish worker’s union Comisiones Obreras against Spanish subsidiary Deutsche Bank, given that the union demanded the bank employ a credible system for verification of fulfillment of contracted schedules or its workers, due to reports of unpaid overtime. Deustche Bank refused to implement it, with legal support from a previous decree from the Spanish Supreme Court, that banned the existence of general obligation to track ordinary work time.
The worker’s commission took the case to the Spanish National High Court, which expressed its doubts about the interpretation of the Supreme Court, taking its case in turn to the European Court. This court awarded the case to the worker’s commission, and thus announces that all European countries should make time tracking obligatory, not just for overtime, but for ordinary time, and this has become known as the EU Working Time Directive.