HR in the Know 1/2024

On October 19 2023, the Court of Justice of the European Union (CJEU) issued a judgment in Case C-660/20, which may have a significant impact on the rules surrounding the paying of part-time employees for hours worked in excess of the regular hours agreed with the employer. Although the judgment was issued as a result of a preliminary question from a German labour court, a consequence of the judgment may also be a change in the provisions of the Polish Labour Code and the existing practices of Polish employers concerning payments for overtime hours.

What did the CJEU judgment concern?

The judgment was handed down in the case of a Lufthansa CityLine airline pilot employed on a 90% full-time basis, with the employee’s part-time status consisting of being granted additional days of leave. The pilots, in addition to their basic salary, were also entitled to additional remuneration for work in excess of a monthly threshold of hours of flight activities. The point of contention was that the above-mentioned thresholds of hours of work were the same for full-time and part-time pilots. The complainant pilot considered that these thresholds should have been reduced in proportion to his contracted working hours and thus claimed against his employer for payment of the difference between the additional remuneration he received and the remuneration he would have received if the aforementioned thresholds had been reduced accordingly.

The German Federal Labour Court, in dealing with the above dispute, questioned whether the lack of such a differentiation of hourly thresholds between full-time and part-time employees did not constitute discrimination against part-timers prohibited by EU law. 

The CJEU confirmed that the setting of identical thresholds uniformly by German legislation (collective agreements applicable to cockpit staff) for all employees performing the same or similar work, without taking into account their individual working hours, for the purpose of granting additional remuneration, constitutes less favourable treatment of part-timers within the meaning of the EU rules. The absence of a reduction of these thresholds for part-time workers means in practice that the latter will either not exceed the thresholds at all or will be much less likely to meet the conditions for receiving additional remuneration. In other words, they are subject to a heavier workload to receive the same benefit. If such differential treatment of part-time workers is not justified by objective reasons (which must be verified by the national court in each individual case), such national legislation must be regarded as discriminatory. It should be noted that the CJEU has taken a different view in some similar cases in the past.

Why might the CJEU judgment be relevant for employers in Poland?

According to the Polish Labour Code, overtime work is work in excess of the employee's working time standards, i.e., as a rule, 8 hours per day and an average of 40 hours per week. This means that (unless otherwise agreed by the parties) part-time employees are not entitled to compensation for overtime work from the first hour over the fraction of a full-time position agreed in the employment contract (e.g. for work from the fifth hour for a ½-time employee) or after exceeding another agreed working time parameter, but only on general principles when they exceed the norms set for a full-time position (from the ninth hour of work on a given day).

At the same time, on the basis of Article 151 § 5 of the Labour Code, the employer and the part-timer are obliged to establish in the employment contract, a threshold of hours in excess of the agreed regular working hours, the exceeding of which entitles the employee to an allowance equal to allowance as if these additional hours were overtime work. 

Thus, at first glance, it seems that - unlike the German regulations - the provisions of the Polish Labour Code do not lead to discrimination against employees working part-time in terms of additional remuneration for extra work. However, the above CJEU judgment in practice undermines the hitherto existing principle of granting additional remuneration for extra work of part-timers expressed in Article 151 § 5 of the Labour Code, and thus may force a change of this provision by the Polish legislator (which, by the way, has been postulated for a long time). The importance of this judgment for Polish labour law is evidenced by the fact that the Polish government actively participated in the proceedings before the Court and presented its position in the case.

This is because currently, in practice:

• an part-time employee's right to an allowance for additional work depends on whether the parties have included appropriate provisions in this regard in the individual employment contract.
• Article 151 § 5 of the Labour Code does not set any guidelines or limitations as to the limit of hours, the exceeding of which, entitles an employee to an allowance for extra work. This means that, potentially, the parties can set the above thresholds based on daily working hours (e.g., for a person employed at 4 hours per day, the allowance is due from the fifth hour of work on a given day) as well as weekly limits (e.g., for a part-timer employed at 30 hours per week, the allowance is due after exceeding 35 hours of work).
• The biggest concern, however, is the rather common practice where parties agree that the allowance for additional work will only be due after the hours worked have exceeded those applicable to a full-time employee (e.g. an employee hired to work 4 hours a day will receive the allowance not from the fifth hour of work, but only after working more than 8 hours in a given day). In such case, in practice, the part-timer will not be paid additionally for extra work (for hours in excess of the agreed regular working hours, but less than the number of hours applicable to a full-timer) and will only receive the overtime allowance after exceeding 8 hours of work.

The consequence of the CJEU judgment may primarily result in potential claims by part-time employees for payment of an allowance for each hour worked in excess of the agreed working hours (i.e. already from the first hour in excess of the employee's agreed part-time hours). Such claims may be raised in particular by those employees whose contractual threshold for extra hours was set identically to that for full-time employees (i.e. they were realistically not entitled to an allowance at all under Article 151 § 5 of the Labour Code). These employees have gained an instrumental argument in their dispute with an employer for additional remuneration. 

How many employees might be affected by this risk? According to the Central Statistical Office (CSO) data for Q4 2022, in Poland only 6.1% of employees (just over one million people) worked part-time (by comparison, the European Union average according to Eurostat data for 2022 is 17%).   

What can be done today?

At the moment, the effects of the CJEU judgment on Polish labour law are being analysed by the Ministry of Labour - we will keep you informed about the Ministry's actions in this regard. However, there are even some views by representatives of the labour law doctrine that, following the C-660/20 judgment, the provision of Article 151 § 5 of the Labour Code cannot be applied by the parties to the employment relationship or by the courts. In the meantime, however, we would recommend that the company's practices and template employment contracts be reviewed with regard to the remuneration of part-time employees, so as to introduce, in particular, provisions limiting the risks described above.