No new rules on overtime

Over the past two years, a hot topic of debate has been whether there will be a new approach to the distribution of the burden of proof following the European Working Time Directive (Directive 2003/88/EC) and the Court of Justice of the European Union’s (CJEU) “timekeeping” ruling. In its eagerly awaited decision of 4 May 2022 (5 AZR 359/21), the German Federal Labour Court has maintained its previous line: the burden of proof of overtime is generally on the employee. There will be relief among employers for the time being, as the feared deluge of lawsuits has been averted.

Suing for overtime pay

The situation on which the present ruling is based was very common: The claimant, who had worked for the defendant as a delivery driver for five years, brought an action for overtime pay to the employment court Emden. He had recorded his working hours electronically. But the system only recorded the start and end times, not breaks. An analysis of working hours at the end of his employment showed the claimant had a positive balance of 348 overtime hours. In 2019 he brought an action for overtime payment of around €5,000. He made a blanket submission that he had worked the entire time, since no breaks were possible due to the large number of deliveries. The employer disputed that and refused to pay, saying it would have to deduct many hours for mealtimes and smoking breaks.

Case law to date

Since 2013, the Federal Labour Court’s decisions have been clear on this point: overtime is only paid if the employer orders it, approves it or at least tolerates it. In cases of doubt, the employee must present and prove the overtime worked. It is not sufficient to make a blanket statement. Instead, the employee must make a substantiated submission on every overtime hour.

CJEU’s “timekeeping” ruling

The established German case law of many years was revisited in the CJEU ruling of 19 May 2019 (C-55/18). In the well-known “timekeeping” ruling, the Luxembourg judges decided that employees’ actual working time had to be recorded for their own protection. That was the result of the interpretation and application of the European Working Time Directive (Directive 2003/88/EC), according to the judges. The Member States were called upon by the CJEU to oblige employers to set up an “objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.” Effective worker protection was only guaranteed, they said, if the actual working time was recorded and documented.

Surprising decision by Emden employment court

The employment court Emden (partial judgment of 9 November 2020 – 2 Ca 399/18) took this as an opportunity to make a surprising change of direction. To the claimant’s delight, the court held that the burden of proof in relation to the overtime pay claimed was on the employer, based on the obligation laid down in CJEU ruling to record and monitor working hours. If the employer fails to record working hours, that constitutes obstructing the obtaining of evidence, according to the judge. As a result, the court awarded the claimant his overtime pay. The court made similar decisions in two other cases as well.

However, Lower Saxony Regional Labour Court (judgment of 6 May 2021 – 5 Sa 1292/20) set aside the judgment on appeal, arguing the CJEU ruling was only a statement on the obligation to record working time, whereas payroll accounting was an issue concerning pay, the Court said. What’s more, the CJEU ruling only imposed an obligation on the Member States and not directly on individual employers.

No change to Federal Labour Court precedents

The Federal Labour Court agreed with the Regional Labour Court’s opinion. And so the situation remains the same: overtime hours still have to be proven by the employee. The Federal Labour Court set out its grounds in the press release available to date on the judgment of 4 May 2022, stating that the CJEU ruling only dealt with the issue of occupational health and safety and the effective limitation of maximum working hours for employees. Therefore the European Working Time Directive cannot have any impact on German procedural law, it said. If the Federal Labour Court had upheld the Emden judges’ decision, companies would have faced a deluge of lawsuits for overtime pay.

Conclusion and outlook

To the relief of employers, the Federal Labour Court’s judgment confirms the legal precedents on the burden of presentation and proof in proceedings for overtime pay. But that is not the end of the matter. After all, the essential requirements set by the CJEU on introducing an obligation for companies to fully record working hours remains in place. The ball is currently in the German legislator’s court. Since the European requirements are likely to be implemented in this legislative period, the upcoming legislative procedure should be closely monitored and employers should start preparing now for the possible introduction of timekeeping systems.