New Rulings on Overtime Pay for Part-Time Employees – EU Law Changes Established Practice
A new landmark arbitration award establishes that part-time employees can no longer be denied overtime pay until they reach the full-time threshold of 37 hours per week. The decision, delivered in the wake of two rulings from the Court of Justice of the European Union, changes long-standing practice pursuant to the industrial collective agreements and has implications far beyond the collectively bargained sector.
The Decision of the Labour Arbitration Tribunal
On 4 February 2026, a labour arbitration tribunal composed of three Supreme Court judges issued a ruling on overtime pay for part-time employees covered by the Industrial Collective Agreement (Industriens Overenskomst) and the Industrial Agreement for Salaried Employees (Industriens Funktionæroverenskomst).
The tribunal concluded that the existing rules governing overtime pay for part-time employees are incompatible with the EU Part-Time Work Directive and therefore cannot be maintained.
The Previous Scheme
Under the previous scheme, part-time employees were only entitled to overtime supplements once their working hours exceeded the full-time norm of 37 hours per week. This meant that part-time employees had to work significantly beyond their individually agreed hours before becoming entitled to overtime pay—more so than comparable full-time employees.
The arbitration tribunal found that this difference in treatment is incompatible with EU law.
New Legal Position for Part-Time Employees
As a result of the ruling, part-time employees are now entitled to overtime supplements for hours worked beyond their individually agreed working time, provided that comparable full-time employees at the same company would have received overtime pay in a similar situation.
The decisive factor is therefore no longer the 37-hour full-time threshold, but rather the part-time employee’s agreed working hours assessed based on the company’s practice for full-time employees.
EU Law Basis
The tribunal’s reasoning is based on the EU Part-Time Work Directive, which rests on a fundamental principle of equal treatment. Part-time employees must not be treated less favourably than comparable full-time employees solely because they work part time, unless such different treatment is objectively justified.
The directive aims to ensure genuine equal treatment regarding pay and employment conditions, including payment for additional and overtime work.
In the joined cases C-184/22 and C-185/22, the Court of Justice of the European Union held that a provision in a German collective agreement granting overtime supplements only for hours exceeding the full-time norm constituted unlawful discrimination against part-time employees and amounted to gender discrimination.
The Court reached a similar conclusion in case C-660/20 (19 October 2023).
Company-Specific Assessments Required
The consequence of the arbitration award is that companies must now carry out a specific assessment relating to overtime for part-time employees. For example, if a part-time employee has agreed working hours of 25 hours per week and works 30 hours, those additional five hours may already qualify for overtime supplements—provided that a comparable full-time employee in the same situation would have received overtime pay.
This assessment presupposes that comparable full-time employees exist, which depends on the specific circumstances at the company.
Impact Beyond Collective Agreements
Although the ruling directly concerns the Industriens Overenskomst and the Industriens Funktionæroverenskomst, its implications extend further. The EU Part-Time Work Directive applies to all employees, regardless of whether they are covered by a collective agreement. Companies without collective agreements should therefore review their overtime practices to ensure that part-time employees are not placed at a disadvantage compared to full-time employees in comparable situations.
Such differences may be contrary to EU law and could give rise to claims for back pay.
What Companies Should Do Now
Companies covered by the Industriens Overenskomst or the Industriens Funktionæroverenskomst can no longer administer overtime for part-time employees based on the 37-hour threshold.
At the same time, companies without collective agreements should review their overtime practices for part-time employees to ensure compliance with EU law and reduce the risk of back-pay claim.
