Overtime bonuses for part-time employees

BAG, judgement of. 5.12.2024 - 8 AZR 370/20

Part-time work has become increasingly important in recent years. While 27.2 per cent of employees worked part-time in 2011, according to the Federal Statistical Office, around 13 million people will be working part-time in 2023, which corresponds to 31 per cent of all employees. There are also significant gender-specific differences within this group: While every second woman was in part-time employment in 2023, the part-time rate among men was significantly lower at 13 per cent.

Against this backdrop, legal issues concerning labour law, particularly with regard to the equal treatment of part-time employees, have become increasingly important in recent years, both at national and European level. A recent ruling by the Federal Labour Court (BAG) from 5 December 2024 (8 AZR 370/20) illustrates the importance of this topic

Facts of the case

The plaintiff is seeking time credits on her working time account and compensation pursuant to Section 15 (2) of the General Equal Treatment Act (AGG). She is employed by the defendant, a nationwide provider of outpatient dialysis services, as a part-time nurse with 40 per cent of the regular weekly working hours. A company collective agreement concluded between labour union ver.di and the defendant applies to her employment relationship. This provides for a standard of weekly working hours of 38.5 hours. A surcharge of 30 per cent is payable for overtime in excess of this. Over a longer period of time, the plaintiff worked hours that exceeded her individual weekly work obligation, but not that of a comparable full-time employee. The defendant neither paid overtime premiums for the plaintiff's credit balance on the working time account nor granted a corresponding 30 per cent time credit.

The plaintiff considered this to constitute discrimination on the basis of her part-time employment and her gender, as the defendant predominantly employs women on a part-time basis

Decision

The Federal Labour Court (BAG) ruled in the plaintiff's favour that she was entitled to the requested time credit and compensation. 

Unequal treatment of part-time employees

A provision in a collective agreement that requires part-time employees to exceed the regular working hours of a full-time employee in order to earn overtime pay treats part-time employees less favourably than comparable full-time employees because of their part-time status. According to the case law of the European Court of Justice (CJEU), part-time employees are treated unequally to comparable full-time employees if the threshold value for the overtime bonus for full-time employees is not adjusted proportionally to their working hours. With a uniform threshold, the "overtime bonus" remuneration component is far more difficult to achieve for part-time employees than for their full-time counterparts. The setting of a uniform lower threshold for earning bonuses therefore violates the prohibition of discrimination against part-time employees pursuant to Section 4 (1) Part-Time and Fixed-Term Employment Act (TzBfG) if there are no objective reasons for the unequal treatment.

Absence of an objective reason

An "objective reason" requires that the difference in treatment found is justified by the existence of clearly-defined, concrete circumstances characterising the employment condition in question in its specific context and on the basis of objective and transparent criteria in order to be able to ensure that the difference in treatment corresponds to a genuine need and is appropriate and necessary for the attainment of the objective pursued

The BAG ejected the existence of any objective justification for the unequal treatment. 

On the one hand, the purpose of the collective agreement regulation on overtime pay is to prevent the employer from assigning overtime. In fact, however, the collective agreement regulation has the opposite effect through the standardised threshold value: it is financially attractive for the employer to use part-time employees to work overtime because no overtime premiums are due for these additional hours. 

An objective reason for the unequal treatment could also not be recognised in the aim of preventing less favourable treatment of full-time employees compared to part-time employees. If both groups of employees can claim the overtime supplement once they exceed their contractually owed working hours, there is no unequal treatment of full-time employees.

Compensation

Since no objective justification exists for the unequal treatment, such a provision in a collective agreement also constitutes indirect discrimination on the grounds of gender against female employees if there are significantly more women than men in the group of part-time employees. This was the case here. The defendant employer could also not rely on the argument that it is only liable for compensation for intent and gross negligence when applying a collective agreement (Section 15 (3) AGG). This is because the liability privilege does not apply to in-house collective agreements such as the one at hand if interpreted in accordance with EU law. The BAG did not have to decide whether the regulation as a whole is contrary to European law. 

The BAG therefore awarded the plaintiff additional compensation - albeit in the moderate amount of EUR 250.00. 

Practical note

The BAG's decision has far-reaching consequences in practice. It forces employers and collective bargaining parties to review their existing regulations and, if necessary, adapt them in order to avoid discrimination. It is particularly important to emphasise that the court addressed not only the direct discrimination of part-time employees, but also the indirect discrimination of women who constitute the majority of part-time workers. In light of this case law, employers should always review the working conditions of part-time employees from the point of view that they may also constitute gender-based discrimination.