Industry 4.0 and digitalisation of the working world: Shaping the working world of tomorrow with the laws of yesterday (April 2020)
„Industry 4.0“ is an expression for the importance of software and the Internet, which have significantly accelerated and enhanced the digitalisation of industrial processes. Based on labour law, „work 4.0“ refers to a new world of work created by digitalisation with new forms of work. The following article will outline whether central labour law concepts can still provide for a contemporary regulatory framework in this future world of work.
Definition of Enterprise 4.0
The digitalisation of the world of work, which is progressing at an incredible speed, is leading to a virtualization of employment relations. Hanau speaks of „de-industrialisation“, Giesen/Kersten state that „in the digital world of work, enterprises are losing their social and legal contours“. The concept of the enterprise is of particular relevance for labour law. Does the previous understanding of when an enterprise exists satisfy the requirements of digital employment relations? For the intervention of employee protection provisions such as the Dismissal Protection Act, the Works Constitution Act or § 613a German Civil Code, the existence of an enterprise is a central starting point. The term „enterprise“ is defined as an organisational unit within which the employer and its employees continue to pursue, through the use of technical and intangible means, certain technical purposes which are not limited to satisfying their own needs. It is questionable to what extent the characteristic of the „organisational unit“ satisfies work 4.0 requirements, particularly with regard to the geographical boundaries of employment relations. Furthermore, not only the digitalisations of employment relations, but also co-working spaces as well as co-working communities lead to the question of whether the existing definition of the term is still suitable as a sufficient starting point for the applicability of employee protection regulations.
It is questionable whether one can counter the problem of the demarcation of the enterprise with the principles for the operational inclusion of home office and/or telework places. Such a service within an enterprise presupposes both a legal, and an actual relationship to the owner. Accordingly, an employee belongs to the enterprise, if he stands in an employer-employee relationship to the owner and is employed within the operational organization by the owner. Such a legal relationship exists with home office employees, so that the allocation to the enterprise still seems unproblematic. The same applies to the co-working space. Here, the employees are usually allocated to the initial enterprise, especially if their activity in the co-working space is limited in time. If, on the other hand, a co-working space has its own permanent operational structures with management powers, a new enterprise may be created under certain circumstances.
However, even if one rejects the requirement of a geographical unit for the existence of an „enterprise“, the question arises as to whether the interests of employees working in a delimited manner can be expediently represented while retaining the classic concept of an enterprise. With closer consideration, one will conclude however that the principles developed for § 5 paragraph 1 Works Constitution Act for telework form a sufficient basis to allocate such employees to the already existing enterprise of the employer. Even if one were to come to the conclusion here that such delimited employment relationships could not be covered by the principles developed for home offices and telework, it would be appropriate to classify such employment relationships on the basis of the „functional concept of an enterprise“ developed by the Federal Labour Court as early as 2004. The developments of work 4.0 with regard to the concept of an enterprise can therefore be sufficiently taken into account on the basis of the previous legal and judicially developed principles, without a legal change to the concept of an enterprise being necessary.
Working Hours / Rest Periods 4.0
Thanks to increasing digitalisation, working hours can be arranged more flexibly. Employees are increasingly demanding this flexibility, whether in terms of reconciling work and family life or in terms of work-life balance. It is no longer a special employment feature to work from a smartphone or laptop at different times and places.
This already gives rise to the question of whether regular working hours still exist. When can one even speak of „work“? Is it enough to simply confirm an appointment with a colleague with a simple „click“ from the sofa, which takes practically no time? Or what about a short call back during the break, which does not take more than 15 minutes?
It is clear that the removal of boundaries from work, i.e. the transition to flexibility of work in terms of time and place, does not only bring advantages for employers and employees. The problem for employers is that they cannot monitor and control work as before without the use of digital time recording software. Workers are at risk of consciously or unconsciously exceeding contractual working hours or failing to comply with minimum rest periods. Apart from the possibility of agreeing deviations through collective agreements and – to the extent that this is permitted – through employer/works council agreements (§ 7 Working Hours Act), the introduction of a materiality threshold of, for example, up to 15 minutes below which rest breaks cannot be assumed is discussed in the specialist literature. According to this, the simple confirmation of an appointment by click and the sending of a short message to colleagues would not constitute „work“ within the meaning of the Working Hours Act.
Whilst the arguments in literature are comprehensible, in particular the teleological interpretation of § 5 paragraph 1 Working Hours Act, it is a fact that the Federal Ministry of Labour and Social Affairs in its White Paper on work 4.0 clearly spoke out against such a teleological interpretation and clearly favoured a literal interpretation of the rest period requirements. In consideration of such an understanding of rest periods by the labour administration under consideration of the punishment of breaches of the working hours provisions under §§ 22, 23 Working Hours Act, a telelogical understanding of the term rest period does not appear recommendable given that short interruptions of up to 15 minutes are deemed harmless. Until the lawmakers change the Working Hours Act, employers should make it obligatory for their employees to comply with rest periods. Even short interruptions of the rest period entail the risk of violations of the Working Hours Act. The legislator is requested to modernize the rest period clause in the sense of the advancement of working time forms, either by inserting a materiality threshold or by extending the compensation time provision of § 5 paragraph 2 Working Hours Act to all employers.
Safety at Work 4.0
In addition to the legal problems of working hours, questions arise regarding job safety, in particular with regard to the Occupational Health and Safety Act and the Workplaces Ordinance.
Sections 3 and 4 of the Occupational Health and Safety Act stipulate the principle that the employer must take the necessary measures to ensure the health and safety of its employees. This principle is specified in detail in the Workplaces Ordinance, which also contains the strict requirements for teleworking places. Occupational health and safety legislation is extremely complex and involves considerable expense for the employer. In principle:
Irrespective of the form of so-called “new work” – insofar as this is an employment relationship – every employer is obliged to carry out at least one risk assessment in accordance with § 5 Occupational Health and Safety Act. In the case of a home office workplace set up by the employer, the regulations on telework according to the Workplaces Ordinance must also be observed. In the case of a mobile office, it will only be possible to request a general risk assessment for working activities in a train, plane or hotel. The provisions of the Workplaces Ordinance are not generally considered to be applicable to activities in the mobile office. The devil is in the details. Employers are well advised to have the question of occupational health and safety assessed separately for each specific form of “new work”.
Finally, we would like to point out the issue of social insurance law for jobs in the home office, in particular conflicts under accident insurance law. The question of whether social insurance or the employer is liable for what type of accident, at what time and at what location has been structured in detail in a number of judgments under social law, but receives little attention in consulting practice. Employers, employees and works councils should seek legal advice before drawing up corresponding agreements.
On the one hand, the legislator promotes digitalisation, for example in the form of subsidies for further training of employees in the digital sector (Qualification Opportunities Act dated 18.12.2018). On the other hand, it is reluctant to make important and urgently needed adjustments to the law, such as the law on working hours. This is a contradiction that must be resolved promptly. On the whole, however, the new forms of work in the working world of the future can be mastered quite well using tried and tested legal instruments.