Does a part-time employee have to be paid an overtime allowance?

The latest judgment of the CJEU, may mix up the current practice of employers.

The CJEU ruling, dated July 29, 2024 (C-184/22 and C-185/22), was issued in a case that involved two female medical staff employees working part-time – 40% and 80% of the weekly working time standard for a full-time employee, respectively. The plaintiffs had a claim against the employer for overtime pay. They pointed out that remuneration was already due after exceeding the working time norms set for them, and not after exceeding the hourly norms of a full-time employee. According to the employer’s collective bargaining agreement, in order to be paid for overtime work, one had to work the same number of hours as a full-time employee. Such an arrangement is grossly unfair, which was also raised by the female employees, as according to them they indirectly experienced gender discrimination, since most of the part-time employees were women.

The court of first instance dismissed the workers’ claims, which resulted in the plaintiffs’ appeal. The German court of second instance in the state of Hesse, found that it was reasonable to order that the employees’ time credits be recorded in their time accounts to correspond to the time wages owed to them, and dismissed their request that the employer pay compensation ( which they claimed due to having suffered discrimination ). Each party appealed the ruling in the part not corresponding to them. The Federal Court of Germany said that in order to make a ruling, it would be necessary to determine whether or not there had been discrimination on the basis of part-time employment or gender.  The proceedings were suspended while the SFN referred questions to the CJEU on whether discrimination had occurred.

The CJEU found that the employer’s arrangement to pay overtime disadvantages part-time employees, since such an employee is much less likely to achieve such hours than a full-time employee. The Court also found that the fact that the majority of part-time employees were women, resulting in lower pay in relation to hours worked, puts female employees at a greater disadvantage than male employees, and is therefore an indirect manifestation of gender discrimination.

Such a position puts part-time employees in a better position to claim overtime pay, regardless of how many overtime hours there are in relation to the size of their full-time job. As a result, the work and time they perform is paid in full. This, in turn, results in a financial burden for the employer, who, when deciding to hire part-time employees, intends to reduce the costs and expenses of hiring employees, and the position presented in the CJEU judgment imposes an obligation on the employer to pay overtime to part-time employees.

Certainly, such an approach to compensation for part-timers will encourage the earning of these overtime hours, which can help improve the operation of the company. On the other hand, however, the introduction of such a solution may cause employers to be reluctant to hire part-timers, resulting in difficulties in finding a job or reconciling work with other responsibilities.

WHAT DOES POLISH LABOR LAW SAY ABOUT IT?

Under Polish labor law, the overtime allowance should be specified in the contract. The employment contract should contain a provision on the number of hours beyond which the employee is entitled to remuneration and an allowance as for overtime. The lack of an appropriate regulation in this regard in the contract means that overtime work, will be subject to remuneration only after 8 hours of daily work and 40 hours of average weekly work.

Such a solution is something between the CJEU judgment and the situation that was the subject of the plaintiffs’ claim.

The contractual arrangement of paid overtime protects both the employer and the employee, as both are guaranteed certain rights and obligations. The employer is obliged to pay overtime, the amount of which is fixed in the contract, while the employee is assured that the overtime will be paid. In the absence of such regulations in the contract, it is the employee who is at a greater disadvantage, since only after 8 hours in a day or 40 hours in an average week, can he claim wages.

DOES THE TSUE RULING CHANGE ANYTHING?

Employees who do not have such provisions in their employment contracts, but who work overtime, but less than 8 hours in a 24-hour period and 40 hours in an average week, can directly invoke the CJEU judgment (29.7.2024, C-184/22 and C-185/22) in disputes with the employer, as CJEU rulings are relevant to European Union law, which takes precedence over national law. CJEU rulings have binding force on national courts, so they are obliged to take them into account when deciding.

The CJEU judgment of July 29, 2024 (C-184/22 and C-185/22) significantly affects the legal position of part-time employees, strengthening their position vis-à-vis employers. The Court found discriminatory practices under which overtime pay was only payable after the number of hours worked exceeded the number of hours provided for a full-time employee. Such rules put part-time employees, who are mainly women, at a particular disadvantage, which constituted indirect gender discrimination.

As a consequence of the CJEU’s ruling, part-time employees can claim remuneration for each hour in excess of their individually determined working hours, without having to reach the working time standard of full-time employees. While on the one hand this approach ensures full remuneration for actual hours worked and protects against discrimination, on the other hand it imposes additional financial burdens on employers, which may reduce the attractiveness of part-time employment. What impact the CJEU judgment will have on the practice of the Polish labor market, we will probably observe in the near future