Judgement from the Court of Justice of the European Union regarding overtime supplement

The case concerned two German care assistants, providing outpatient dialysis treatment. The employees were employed to perform their services on a part-time basis, with employment fractions of 40% and 80% of the weekly working time of 38.5 hours as laid down in the national collective agreement. The employees in question had over time provided services in excess of the agreed working hours. Overtime supplement was not granted to the respective personnel, as they had not exceeded the weekly working time threshold for full-time employees. The employees claimed to be treated in a less favourable manner than comparable full-time workers pursuant to Clause 4(1) in the Directive 97/81/EC concerning the Framework Agreement on Part-Time Work.

With respect to the issue of whether the non-payment of overtime pay was contrary to the Framework Agreement on part-time work, the CJEU stated as follows:

"Thus, persons working as part-time care assistants who work hours in excess of the normal working time agreed in their contracts of employment without receiving additional pay are treated unequally as compared with persons working as full-time care assistants whose hours worked in excess of 38.5 hours per week give entitlement to additional pay [...]" (paragraph 42).

The CJEU held that such a scheme entailed a "less favourable" treatment of the part-time workers as described in Clause 4(1) of the Framework Agreement. Thus, the CJEU concluded that a difference in overtime pay for part-time and full-time workers cannot be justified by neither the objective of deterring the employer from requiring workers to work overtime in excess of the hours agreed in their employment contracts, nor by the objective of preventing full-time workers from being treated less favourably than part-time workers.

The judgement in the joined cases challenges the Norwegian legal framework on overtime work and overtime supplement, which stipulates that part-time employees must exceed the prescribed limits for normal working hours (40 hours per week pursuant to the Norwegian Working Environment Act and 37,5 hours per week in most collective bargaining agreements) in order to receive overtime supplement. 

The ruling from the CJEU will not be given automatic application in Norway, and the question remains if, and if so how, the legislators may change the Norwegian Working Environment Act. Should the legal considerations by the CJEU lead to changes in Norway, part-time employees with an employment fraction of e.g. 50% will be entitled to the overtime supplement if their weekly working time exceed 20 hours. Several other aspects of part-time employment would also potentially be affected by the ruling. An unanswered question is how to handle employees who on their own initiative are taking on additional shifts, and thereby working more than their agreed working hours.

Moreover, many full-time employees who are not bound by collective agreements do still have agreed weekly working hours of 37.5 hours, where the Norwegian rules regarding overtime are not applicable today before the hours exceed the prescribed limits of 40 hours per week in the Working Environment Act. It is unclear how the ruling would affect these full-time employees. 

The ruling from the CJEU also has great relevance in Denmark, where many collective agreements and individual employment contracts include a principle similar to the German rules. This is based on the view that it would otherwise be positive discrimination in favour of part-time employees if they were entitled to overtime pay for fewer hours than full-time employees. The consequences of the ruling are expected to be a significant topic in the upcoming collective bargaining negotiations in the private labour market, where a breakthrough agreement is again expected in the industrial sector in February 2025.

In Sweden, there is no legal minimum wage or statutory right to overtime pay. For a Swedish employee to be entitled to overtime pay, it must be included either in the individual employment agreement or in the applicable collective bargaining agreement. Our assessment is that the decision from the CJEU will likely not lead to legislative changes regarding the right to overtime pay for part-time employees. However, the decision from the CJEU may be a topic of discussion for the upcoming renegotiations of the majority of the collective bargaining agreements, which are to be held in 2025. In Sweden, the majority of the collective bargaining agreements already include provisions entitling part-time workers to a form of overtime supplement, a so-called "additional hours supplement" (Sw. mertidsersättning), which part-time employees may be entitled to for work beyond their individual ordinary working hours, up to the ordinary working hours for a full-time employment. However, not all collective bargaining agreements include provisions on additional hours supplement, thus, for the parties to these collective bargaining agreements, the decision from the CJEU may have an impact on the upcoming renegotiations.