It's mandated by law in many EU countries, even in the more privacy focused ones. To track workers working time to prevent or track any overtime hours.
But it's also used by companies to make sure all workers are at their desk for the full 40h, and not doing something else like commuting or 2h lunches. Hence why most companies don't allow WFH. They can't track your working time at home, and they're not allowed to install spyware on your devices, so butts ins eats at the office it is.
No, Jira doesn't work for that. The law requires proper tracking of worktime, vacations, sick days, etc, so there are separate apps for that, some tied to a physical badge or token you need to scan when you enter/exit the building so that the system starts or stops tracking your time at work and that managers have a view who's in the office and who's not. Kind of like the punch cards and clocks of old days except digital.
Jira is explicitly to track the time you put in on specific technical issues/stories so that scrum masters and project managers have an idea how long tasks take, Jira doesn't track how long you spent in the office which can be longer than the amount of coding task you filled.
In a previous company I worked at there were displays in the building showing the current presence/absence of each employee, if they're in the office or not, if they're on sick leave, vacation, etc via icons next to their names on the displays like in some dystopian hellhole. And this was a tech company in one of the richer EU countries. Totally legal btw.
There are Jira add-ons for tracking leave, though. I can't see anything in the EU directive that mandates anything more than that although I can imagine some member states implementing stricter laws for the sake of simplicity. It's bonkers, it's basically banning a company from just saying "Work at your own schedule and don't work too long".
No, but if they started asking people to work their contracted hours they would be the ones to lose because the average work week is way above the 40 hours that is in our contracts.