Facts of the Case

Two part-time employees of an outpatient dialysis provider, whose working time accounts showed several overtime hours, filed the lawsuits. The employment relationships are governed by a collective framework labor agreement (MTV) with the trade union ver.di. This agreement stipulates that overtime exceeding the monthly working hours of a full-time employee and not compensated by time off within the respective calendar month must be remunerated with a 30% premium. The plaintiffs demanded, firstly, that this premium be paid in the form of additional time credits in their working time accounts. Secondly, since more than 90% of the defendant’s part-time employees are women, the plaintiffs also claimed compensation under Section 15(2) of the General Equal Treatment Act (AGG) for indirect discrimination based on gender.

Decision

The Eighth Senate of the BAG confirmed that the threshold for overtime premiums derived from full-time employment results in unequal treatment of part-time and full-time employees. This assessment is indeed debatable. The relevant provision of the MTV treats part-time and full-time employees equally in that both groups are remunerated identically for the same amount of working hours. Simplifying to the regular weekly working hours, which in the cases to be decided was 38.5 hours for full-time, both groups receive no overtime premiums for 30 weekly hours worked, while they receive premiums for 3.5 hours at 42 weekly hours worked. However, the BAG’s legal assessment was not surprising, as the court had previously referred the question of unequal treatment to the European Court of Justice (ECJ), which affirmed a disadvantage for part-time employees in such a scenario: unlike in a previous ruling, the ECJ now bases its decision on the fact that part-time employees would have to work more overtime relative to their individual contractual regular working hours to receive overtime premiums. Therefore, equal treatment of both groups requires a proportional reduction of the threshold for part-time employees along their individual regular working hours. The Eighth Senate of the BAG has now adopted this position.

The ECJ had also provided clear indications on whether the unequal treatment of part-time and full-time employees due to the uniform threshold for overtime premiums could be justified by objective reasons. The goal of deterring employers from ordering overtime to protect employees’ leisure time through premiums does not justify providing such premiums only after exceeding the regular full-time working hours. This is because, on the contrary, it would rather lead to overtime being demanded especially from part-time employees. The BAG concurred with this position in the two cases decided on December 5, 2024, and ruled that the plaintiffs must be granted the requested time credits in their working time accounts.

Furthermore, the BAG awarded each of the two plaintiffs compensation of EUR 250 under Section 15(2) AGG for indirect gender discrimination. The court found it sufficient that the discriminatory full-time threshold for overtime premiums predominantly affected women in this case, because more than 90% of the part-time employees at the defendant employer were women. The fact that the proportion of women among full-time employees at this employer was also significantly higher than that of men, meaning the disadvantage primarily affected part-time women compared to full-time women, did not change this assessment.

Outlook

According to the press release available so far, the BAG could not identify any justifying objective reason for the unequal treatment in the two cases decided on December 5, 2024. There are indications that the BAG did not need to address the question of whether a uniform threshold for overtime premiums derived from full-time employment could at least be justified by the argument that these premiums compensate for an extraordinarily burdensome workload that only arises after exceeding the regular full-time working hours. The Hessian Higher Labor Court, as the previous instance, had concluded, based on the system of the MTV, that at least this labor agreement does not pursue the purpose of protecting against such special burdens by increasing the cost of overtime. However, the ECJ has already significantly restricted this justification approach as well. According to the Luxembourg judges, uniform thresholds for overtime premiums do not hold where there is a lack of objective values, scientific findings, and general experience on when overtime results in a particularly burdensome workload.

However, as regards the presence of such general experience values, it would be at least conceivable, given the constitutionally protected collective bargaining autonomy, to give significant weight to the assessment of the collective bargaining parties with their specific industry and company knowledge. This should especially apply if the collective bargaining partners align the thresholds with the legal valuation of the Working Hours Act, which does not allow working hours exceeding eight hours per working day on a permanent basis. Finally, it cannot be ignored if the threshold is set as low as possible in favor of the employees, and premiums apply immediately upon exceeding the regular full-time working hours.

Nevertheless, the decisions of the Eighth Senate of the BAG on December 5, 2024 – like previous decisions of the Sixth and Tenth Senates – point in a different direction. Therefore, the practice will therefore at the latest now have to prepare for proportionally calculated thresholds for overtime premiums, leading to a significant increase in the cost of part-time employment subject to collective labor agreements.

Photo: shutterstock / fizkes

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