Part-time employees' right to overtime pay
Two new rulings from the Industrial Arbitration Tribunal addresses whether part-time employees are entitled to overtime pay compared to full-time employees.
In many collective bargaining agreements within the public sector, part-time employees were not entitled to overtime pay for work performed beyond their individual working hours and the full-time norm stipulated in the collective bargaining agreement. Work within this range was compensated solely with the standard wage. Only when part-time employees worked beyond the full-time norm, in the same way as full-time employees, was their right to overtime pay triggered.
Some labour market parties in the public sector disagreed about the compatibility of these rules with EU principles of equal treatment. To resolve the disagreement, the parties jointly decided to settle the matter through industrial arbitration.
The previous practice in the area of the collective agreements was contrary to EU law
According to the Part-time Work Directive, part-time employees cannot be treated less favorably than comparable full-time employees unless there is an objective and reasonable justification for the difference in treatment.
In the cases, the arbitrators initially found that the way overtime is calculated – daily, weekly, or monthly – was irrelevant to the assessment of discrimination. The decisive factor was that part-time employees did not receive overtime pay for working between their individual hours and the full-time norm, whereas full-time employees received overtime pay for working beyond the full-time norm. Thus, the basic scheme in the collective agreements discriminated against part-time employees.
The arbitrators also found that promoting full-time employment and budgetary or work-related considerations could not justify this discrimination. It also did not matter whether the overtime was voluntary or imposed by the employer.
The temporal effect of the rulings
Another central theme in the cases was the temporal scope of the rulings specifically, how far back part-time employees could claim repayment for missing overtime allowances.
The rulings establish that the temporal effect runs from January 20, 2000, the latest date by which the Part-time Work Directive should have been implemented into Danish law. As a starting point, this means that employees can claim repayment for missed overtime allowances dating back to this date.
However, the arbitrators emphasized that, in cases involving back pay, objective circumstances not covered by the general treatment in the industrial arbitration may justify differential treatment. Additionally, the arbitrators stated that Section 4(2) of the Part-time Work Directive implies that part-time employees may be entitled to a proportionally lower overtime supplement than full-time employees for working hours between the part-time and full-time norms. However, this depends on the specific repayment case.
It is important to note that the rulings are relevant not only when overtime is paid as wages. For example, if full-time employees can take time off in lieu of a higher conversion factor (e.g., 1:2) for overtime, but part-time employees can only take time off of a conversion factor of 1:1 for hours between the part-time and full-time norms, this would constitute unlawful discrimination.
Littler notes
The rulings have far-reaching implications because they establish that the previous standard practice in collective bargaining agreements within the public sector regarding part-time employees' right to overtime pay violated EU law.
The rulings are expected to generate a significant number of repayment claims in cases where part-time employees worked between the part-time and full-time norms without receiving allowances. It is important to note that these rulings are not only relevant in the public sector; they may also affect other employment relationships where the same type of discrimination has occurred.
However, it must be emphasized that the arbitrators have noted that specific cases may involve objective circumstances justifying such differential treatment. Additionally, the pro rata temporis principle may entail that part-time employees are only entitled to proportionally lower allowances than full-time employees for hours between the two norms.
Littler notes, however, that claims for repayment are generally subject to the standard limitation period of five years for claims arising from employment.
