Standby

Term and general definition of standby

The term standby is a term originating from English that is used in different legal contexts, each carrying different meanings. In legal terms, standby (also: stand-by, stand-by status) typically refers to a state of readiness, which is especially relevant in labor law, energy law, the area of guarantees (e.g., Standby Letter of Credit), as well as in public law. The basis of this state is regularly the expectation of being able, in need, to quickly provide or hold ready a certain service without engaging in regular activities.

Below, the different areas of application and the legal implications of the term standby will be comprehensively discussed.

Standby in labor law

1. Definition and legal basis

In labor law, the standby status generally refers to so-called on-call duty or on-call availability. According to German working hours law, especially the Working Hours Act (ArbZG), a distinction is made between active working hours, on-call duty, and on-call availability.

• On-call duty: The employee remains at a location determined by the employer (often the workplace) to be able to begin work immediately when needed.
• On-call availability (standby): The employee stays outside his or her regular workplace but must be reachable at any time for short-term work assignments.

1.1. Classification under working hours law

• Periods of on-call availability—in contrast to presence during on-call duty—are, as a rule, not regarded as working time within the meaning of the ArbZG, as long as no actual work is performed.
• If work is performed during standby status, the working time starts from the beginning of the work assignment.

1.2. Remuneration and compensation

• In principle, a distinction must be made between standby periods without actual work (usually lower or lump-sum compensation) and actual working time during deployment (full compensation).
• Collective agreements and company agreements regularly govern the specific structure and remuneration of standby times.

1.3. Occupational safety requirements

• Maximum working hours and minimum rest periods must also be observed in the context of standby duties.
• European case law (ECJ judgments) continually specifies the requirements for the structure of standby periods with regard to opportunities for leisure and the reasonableness for employees.

Standby in energy law

2. Meaning and legal framework

In energy law, standby refers to the status of energy installations kept operational so that electricity can be fed into the grid on short notice (e.g., power plant reserve, grid reserve). The aim is to ensure grid stability and security of supply.

2.1. Statutory provisions

• The Energy Industry Act (EnWG) and regulations regarding system security set the conditions for standby reserves and the relevant compensation mechanisms.
• Operators of power plants can be obliged to keep facilities in standby mode.

2.2. Compensation and indemnification

• For maintaining standby capacities, the legislator provides for compensation mechanisms and remuneration for lost revenues.
• The Federal Network Agency coordinates and regulates the requirements for the deployment and remuneration of standby facilities.

2.3. State aid law and competition law

• Standby provisions in the energy sector are also subject to state aid review at the European level to prevent market distortions.

Standby and Standby Letter of Credit in banking and commercial law

3. Standby Letter of Credit: Definition and legal classification

In international commercial and banking law, the Standby Letter of Credit (SBLC) is a type of unlimited, abstract bank guarantee. It serves to secure payment to the beneficiary in case the debtor fails to perform contractually agreed obligations.

3.1. Legal nature

• Unlike a traditional letter of credit, the SBLC does not constitute a payment instruction for performance of the contract itself, but rather a recourse guarantee in case of non-performance.
• International standards such as the International Standby Practices (ISP98) or the Uniform Customs and Practice for Documentary Credits (UCP 600) regulate the individual modalities.

3.2. Liability issues

• The issuing bank undertakes to pay on a corresponding drawdown within the legal requirements.
• Form and scope of the security depend on the terms of the underlying transaction.

3.3. Areas of application

• The SBLC is frequently used in international trade, as security for rental or leasing contracts, or for large projects.

Standby in public law

4. Readiness and standby in public duties

In public law, standby status is especially applied in disaster protection, fire brigade, and other emergency services (such as rescue services or police).

4.1. Legal framework

• Federal and state regulations (e.g., fire brigade acts, disaster protection acts) govern the conditions, rights, and obligations during standby service.
• In addition to response teams, technical facilities can also be kept on standby so that they are quickly available in the event of major incidents.

4.2. Data protection and notification obligations

• The use of electronic systems during standby operations is subject to data protection requirements, in particular regarding accessibility data and logging.

Standby in IT law and data protection

5. Standby mode in the digital environment

In the field of information technology, standby mode describes the operation of IT systems in a state of readiness, in which technical functions are reduced but essential systems are kept operational.

5.1. Relevance for data protection and IT security

• The technical implementation and control of standby mode must meet data protection requirements.
• Attacks during the standby phase (e.g., via remote access) fall under IT security standards such as the General Data Protection Regulation (GDPR) and the IT Security Act.

Summary and delineation

The term standby holds multifaceted relevance in the legal field. The key commonality across all areas of application is the state of constant readiness without immediate activity. However, the specific legal framework as well as the consequences in labor, energy, commercial, and public law vary substantially according to sector and context.

Awareness of the differentiated legal conditions of standby status is essential for contract drafting as well as for daily dealings with technical or human resources. Whether as part of employment relationships, resource readiness in the energy sector, or in the context of payment guarantees such as the Standby Letter of Credit: The respective legal requirements, obligations, and compensation rules must be expressly stipulated in contracts and adapted to the applicable legal provisions.

Frequently asked questions

Must standby periods be considered working time within the meaning of the Working Hours Act?

Whether standby periods are to be regarded as working time within the meaning of the Working Hours Act (ArbZG) depends primarily on how restrictive the requirements are during on-call duty (colloquially “standby”). According to the case law of the European Court of Justice (ECJ) and the Federal Labor Court (BAG), it is decisive whether the employee must remain at a location determined by the employer and to what extent his or her free time is thereby restricted. If the employee must remain at a specific location and be ready to work at short notice (classic on-call duty), the entire standby time counts as working time. However, if the standby is performed “at home” and the employee only needs to be reachable by phone, the degree of actual restriction is key. If the response time is very short or if the employee is frequently actually called upon to work, this may also be considered working time. Conversely, if there is only minimal restriction, standby may qualify as on-call availability and thus not be counted as working time under the ArbZG.

What co-determination rights does the works council have regarding the arrangement and organization of standby periods?

The works council has a co-determination right pursuant to § 87 (1) Nos. 2 and 3 of the Works Constitution Act (BetrVG) in setting the beginning and end of daily working time including breaks, as well as in the introduction and design of standby services. Co-determination extends in particular to the distribution and scheduling of standby service, the frequency of availability, and the remuneration rules. Therefore, the employer may not unilaterally order standby services, but must obtain the approval of the works council, if one exists. If no agreement can be reached, the conciliation committee may be called.

Is special remuneration for standby periods required by law?

Labor law does not provide for a general statutory obligation to compensate for standby periods. The only requirement is that the statutory minimum wage must be paid for work actually performed, even during readiness duty. The amount of remuneration for readiness periods without actual work, such as on-call availability, can be determined individually, by collective agreement or by company agreement. Companies bound by collective agreements often apply detailed regulations that distinguish between full working time and reduced standby compensation rates.

How does standby duty affect compliance with maximum working hours and rest periods?

The maximum working hours according to the Working Hours Act (§ 3 ArbZG: maximum 8 hours per working day, exceptions up to 10 hours) and minimum rest periods (§ 5 ArbZG: at least 11 hours after the end of daily working hours) are mandatory protection provisions. If standby periods are regarded as working time, they are fully counted towards these limits. Standby in the sense of on-call availability, in which no or only occasional actual work is performed, affects these limits only insofar as working time and the interruption of rest periods are counted each time the employee has to work. Legally, it must be ensured that the required rest periods and maximum working hours are observed despite standby duties.

What obligations does the employer have when ordering standby services?

Employers are required to comply with statutory working time requirements, especially regarding maximum permissible working hours and minimum breaks, as well as the minimum rest periods. In addition, the employer must design the standby service to take into account data protection, personal rights, and the co-determination rights of the works council. For rotating duty schedules, these must be announced in good time, based on so-called “necessity” (§ 106 GewO). The employer also has a duty of care to avoid disproportionate burdens on the employee (e.g., excessive standby assignments or unreasonable distances/response times).

Can an employee refuse the obligation to perform standby duties?

The obligation to perform standby generally depends on the employment contract and, if applicable, related company or collective agreements. If there is no explicit provision to this effect, a unilateral obligation by the employer is only possible to a limited extent. However, if the employment contract or company agreement stipulates that standby duties must be performed, there is a duty to do so. If this is not expressly regulated, it comes down to the interpretation of the employment relationship and customary practice. Special protections (e.g., for severely disabled persons, pregnant women, or parents on parental leave) may grant a right to refuse.

What special features apply to standby duties in the public sector?

In the public sector, special collective agreement rules (e.g., TVöD, TV-L) often apply. Here, standby duties are usually clearly defined and regulated both organizationally and in terms of remuneration. Compliance with working time regulations and special protection provisions (e.g., regarding rest periods and workload management) must always be observed. The public sector often provides rules limiting the maximum number of standby hours per period and for lump-sum remuneration, which are intended to better protect the interests of employees.