The time setting is located in the user account settings page. This time should be set up for each individual user and set to the timezone that they themselves are located in. This will be the time that is displayed at the top right of each users page when they login.
As there are so many different variations of daylight savings around the world, sometimes it does not adjust the time settings for you. You will have to edit the user settings to set the time an hour forward or back.

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