EU judgment on overtime pay for part-time employees

The European Court of Justice has ruled in the combined cases of C-184/22 and C-185/22 on whether a provision regarding overtime pay in a German collective agreement constituted a less favoirable treatment of part-time employees and gender discrimination.

The underlying directives.

Pursuant to the framework agreement on part-time work (Council Directive 97/81/EC of 15 December 1997)  its is prohibited to treat part-time employees less favorably compared to full-time employees based on their part time status, unless the disparity in treatment can be objectively justfied.

In addition the Council Directive 2006/54/EC of 5 July 2006 implementing the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation prohibits dicricmination on the basis of gender.

Facts of the case

The case concerned two female employees who worked as care providers for ambulatory dialysis treatment in Germany. The employees worked part-time, one at 40% and one at 80% of the standard full time working week, which was 38.5 hours per week.

The employees were covered by a collective agreement pursuant to which they were entitled to overtime pay at an enhanced rate, however only for any hours worked beyond 38.5 hours per week, this being the normal full time working week.

The two female employees claimed  in the German labour court that they were treated less favorably than full-time employees because they did not receive overtime pay for work beyond their contractual part time hours, but only after 38.5 hours of work per week.

Given that 84.74% of the part-time employees with the employer in question were women, it was argued that the provision on overtime pay calso onstituted indirect gender discrimination.

The European Court of Justice’s decision

The European Court of Justice found that part-time employees who worked more than the normal contractual working hours without being entitled to overtime pay were discriminated against compared to full-time employees who received overtime pay for all hours worked beyond their agreed working hours.

The European Court of Justice emphasized that although the right to overtime pay was nominally the same for both part-time and full-time employees, as everyone obtained the right to overtime pay for work exceeding the 38.5-hour weekly threshold, the scheme imposed a greater burden for part-time employees, as they were not entitled to an allowance for the first overtime hour on an equal footing with full-time employees.

Furthermore, the Court found that full-time employees would not be disadvantaged if part-time employees were entitled to overtime pay from the first overtime hour since full-time and part-time employees would be treated equally regarding work exceeding the number of hours stated in their contracts.

Finally, the European Court of Justice found that national provisions stipulating that part-time employees can only receive overtime pay if their working hours exceed the standard working hours for full-time employees could constitute indirect discrimination against women if it could be documented that the provision in question affected a significantly larger proportion of women than men.

Comment

The European Court of Justice has previously addressed the question in case C-660/20 of whether a scheme requiring part-time employees to work beyond the full-time employee’s working hours before becoming entitled to overtime pay was contrary to the framework agreement on part-time work, cf. Council Directive 97/81/EC of 15 December 1997.

In this connection, the European Court of Justice concluded that: “this provision precludes national legislation which makes the payment of an additional salary to part-time employees and comparable full-time employees subject in a uniform manner to the completion of at least the same number of working hours for a given activity, such as a pilot’s flight service, in order to compensate for a workload specific to that activity.”

Several collective agreements contain provisions stating that part-time employees are only entitled to overtime pay when the employee has worked beyond the weekly hours of a full-time employee. The European Court of Justice rullings prompt consideration of whether such provisions can be maintained, including whether the discrimination is justified by “objective reasons” and can therefore be legitimate.

In addition, the judgment clarifies that a provision that limits overtime pay for part-time employees to work exceeding a full-time employee’s regular hours may constitute indirect gender discrimination. Such discrimination can also be legitimized in objective reasons, and thus be legitimate.

The decision from the European Court of Justice can be read in its entirety via this link.