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Summary
A judgment of the Federal Labour Court (Bundesarbeitsgericht, ‘BAG’) of 4 May 2022 has further consolidated the standards developed specifically for the distribution of the burden of proof in the context of compensation claims for the performance of overtime by the employee. The burden of proof lies with the employee and cannot be met by giving mere circumstantial evidence (cf. BAG, judgment of 10 April 2013 – 5 AZR 122/12). Following this recent decision, a different result also does not result from the obligation under Union law to introduce a system for measuring the daily working time of the employee. The background to this is the discussion initiated by the court of first instance as to whether the interpretation of the Working Time Directive 2003/88/EC requires that the employee be granted relief in the process concerning the payment of overtime, since the national legislature has not yet sufficiently transposed the Directive. The BAG has now decided that it is up to the federal legislator to decide on the specific design of the system. Moreover, the BAG found that the Directive’s scope is limited to working time law as a regulatory matter of occupational health and safety law, but the Directive does not provide the Member States with any guidelines on remuneration issues. In contrast, it does not affect the burden of proof in favour of employees in overtime compensation proceedings.
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Facts
The employee was employed as a delivery driver by the employer, which operates a retail business. The employee’s working time was recorded by means of technical time recording, whereby only the beginning and end of the daily working time were recorded, but not the breaks. Upon termination of the employment relationship, the evaluation of the time recording showed a positive balance of 348 hours in favour of the employee. In his claim for overtime pay, the employee demanded payment of € 5,222.67 gross. He claimed that he had worked the entire recorded time. It had not been possible for him to take breaks, otherwise the delivery orders could not have been processed.
In its partial judgment of 9 November 2020 (2 Ca 399/18) the Industrial Tribunal of Emden (ArbG Emden), which had jurisdiction at first instance, upheld the claim for payment of overtime compensation. Referring to the judgment of the CJEU of 14 May 2019, C-55/18 (Federación de Servicios de Comisiones Obreras (CCOO) – v – Deutsche Bank SAE), the Tribunal held that the employer’s obligation to set up a system for recording working hours, as regulated therein, modifies the burden of proof in overtime proceedings. As a result, the burden of proof must be eased in favour of the employee.
The starting point of the underlying CJEU ruling was that Member States must require employers to implement an “objective, reliable and accessible [working time recording] system”. This resulted from an interpretation and application of the Working Time Directive 2003/88 in the light of Article 31(2) of the Charter of Fundamental Rights of the European Union, considering the fundamental right to protection of maximum working time for the benefit of workers. However, this has not (to date) been implemented in the national German legal system on the regulation of working time.
Subsequently, the Emden Tribunal ruled that in the event of non-compliance with these obligations the evidence submitted by the employee – in this case in the form of the timesheets – is sufficient for the acceptance of the overtime allegedly worked. It did not consider the objection of the lack of regulatory competence of the European Union for the remuneration of overtime. Rather, the failure to record working time, despite the existing obligation to record time ‘objectively’, ‘reliably’, and ‘accessibly’, constituted a thwarting of evidence by the employer. Even if this did not result in a complete reversal of the burden of proof, it could result in a considerable easing of the burden of proof for the employee. Specifically, the conclusive justification of the claim in the form of the number of overtime hours worked must be presented. The employer would have to substantiate the evidence presented in this case (in the form of the submitted timesheets) of the employee’s actual work in relation to the recorded working hours with substantiated counterarguments. This was not the case in the present instance.
In its judgment of 6 May 2021 (Sa 1292/20) the Court of Appeal for Lower Saxony (LAG) overruled the judgment of the Emden Tribunal and dismissed the action – with the exception of the overtime already paid by the employer in the meantime. -
Judgment
In the employee’s subsequent appeal, the BAG rejected the revision. It held that, contrary to the judgment of the Industrial Tribunal of Emden, the LAG had correctly recognized that there was no need to deviate from the requirement for the employee to explain the employer’s reason for and attribution of overtime, even against the background of the cited CJEU’s decision of 14 May 2019. Accordingly, the LAG was likely to have correctly stated that the CJEU, in accordance with Article 153(5) of the Treaty on the Functioning of the European Union, expressly lacks the competence to comment on questions of remuneration for work. The principle of limited individual authorization must be upheld. Rather, the regulatory competence is limited – (also) according to the established case law of the CJEU – to ensuring the protection of the safety and health of employees. This is also supported by the fact that, according to the LAG, Directive 2003/88 does not regulate any issues of pay except for paid annual leave. There is precisely no obligation on the part of the Member States to determine the remuneration claims according to the definitions of the terms ‘working time’ and ‘rest period’ in Article 2 of the Directive (so also CJEU 21 February 2018 – C-518/15 Matzak, paragraph 49 et seq.).
As a result, it can be stated that the obligation under Union law to measure daily working time has no influence on the principles developed in German substantive and procedural law regarding the distribution of the burden of proof and presentation in overtime compensation proceedings. -
Commentary
In this case the BAG has maintained its previous line of case law. Despite the undeniably inadequate transposition of the Working Time Directive into national law, the BAG avoids taking this as an opportunity to modify its established case law to the effect of making it easier for employees to bring proceedings for overtime pay because of this deficiency. The following principles therefore continue to apply: in the first stage, it must be shown that the employee worked overtime to an extent exceeding the usual working hours or was prepared to do so on the employer’s instructions. The second stage must be considered against the background that the employer must only pay remuneration for overtime which it has arranged, or which is attributable to it. Accordingly, it must be shown on the part of the employee that the employer expressly or impliedly ordered, tolerated or subsequently approved the overtime worked. In this respect, it must be noted that the principles developed by the BAG on the distribution of the burden of proof for the performance of overtime by the employee and its initiation by the employer are not changed by the obligation to introduce a system for measuring the daily working time performed by the employee, which is based on EU law. Rather, the employee continues to bear the burden of proof. For an order of overtime by the employer, the employee must present who did this, when and in what way. The presumption of the necessity of the overtime cannot be based on the mere presence of the employee at the place of work. For an endorsement, the employer must indicate consent to the recognition of previously worked overtime. In this respect, acquiescence means that the employer knows about the overtime and does not take any precautions to prevent it. In order to be able to speak of an operational necessity, the work must ultimately only be able to be done through overtime.
While the decision is probably to be welcomed from the employer’s point of view, it also shows that limiting the scope of the Directive to the purely public law obligation to limit and document the working time is of little practical help to the individual employee. It does not help them to have the possibility to inform the supervisory authorities about deficiencies in company working hours, as this does not yet lead to them having more money on their pay slip at the end of the month or to overtime no longer accruing instead. Therefore, this case law still does not provide effective legal protection for the employee as long as the legislator does not improve the situation. On the other hand, it has been discussed many times that a full implementation of the Directive in such a way that the national legislator would then also regulate the pay issues would possibly lead to distortions in areas where deviating work concepts outside the usual ‘9 to 5’ work are practiced. This would probably run against the disruptions caused by digitalization, which leads, for instance, to increasingly shifting to remote working. This is also supported by the efforts of the governing coalition to enable flexible working time models while maintaining trust-based working time (cf. Coalition Agreement 2021-2025, SPD/Bündnis90/Die Grünen/FDP, p. 54). Also coworking spaces will probably continue to be still an option for mobile working in the future.
Regarding the obligation of the Member States raised by the CJEU ruling to introduce an objective, reliable and accessible working time recording system vis-à-vis employers, the federal legislator must take action, nevertheless. In this context, it is up to the legislator to determine the actual design of the system, which could, for example, consist of a minor amendment to Section 16(2) sentence 1 of the Act on Working Time (ArbZG) as outlined in the Coalition Agreement. In any case, the Coalition Agreement also provides for an examination of the need to adapt working time law in the light of the case law of the European Court of Justice. So far, the legislator has not yet complied with this. -
Comment from other jurisdiction
Finland (Janne Nurminen, Roschier, Attorneys Ltd): In the Finnish legal system, the principle of protecting the weaker party is generally recognized. This can be seen in the protection of the employee in labour law matters, as the employer is often considered to be the stronger party.
In Finland, the burden of proof is divided between the parties involved in a dispute, and there are no strict rules to be found in the labour legislation concerning reversed burden of proof. The basic principle is that the burden of proof follows from asserting something, i.e., the one invoking a legal fact must also prove it. However, this principle is not absolute in labour law disputes. Case law has confirmed that, for example, in termination-related disputes, an employee’s claim alone leads to the employer’s obligation to prove lawful termination grounds.
According to the Finnish Working Hours Act, the employer is obliged to keep a record of working hours, including overtime worked. Although Finnish labour legislation does not have a specific rule on how the burden of proof is divided between the parties, it has been established in jurisprudence that in unclear situations concerning working time recording it is to the employer’s detriment if record-keeping has been neglected and the employee’s claims cannot otherwise be proven false.
In Finland, the employee’s notes about working hours have often been considered reliable evidence in situations where the employer has neglected to keep records of working hours and the employer is unable to prove that the employee’s notes are incorrect.
Even if an employer has neglected its working hour recording obligation, it can try to challenge the explanation presented by the employee, for example, by proving that the employee is claiming overtime for a time period during which the employee has been on sick leave or otherwise unable to work. In overtime disputes, the courts often need to apply a rather free and difficult estimation on the periods for which the employee is entitled to claim compensation.Subject: Working Time
Parties: Unknown
Court: Bundesarbeitsgericht (Federal Labour Court of Germany)
Date: 4 May 2022
Case number: 5 AZR 359/21
Internet publication: https://www.bundesarbeitsgericht.de/en/presse/darlegungs-und-beweislast-im-ueberstundenverguetungsprozess/
European Employment Law Cases |
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Case Reports | 2022/24 Burden of proof in proceedings on overtime compensation (GE) |
Keywords | Working Time, Juridisch, Arbeidsrecht, Europees recht (EU Recht) |
Authors | Othmar K. Traber |
DOI | 10.5553/EELC/187791072022007003006 |
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Othmar K. Traber, "2022/24 Burden of proof in proceedings on overtime compensation (GE)", European Employment Law Cases, 3, (2022):131-133
A judgment of the Federal Labour Court (Bundesarbeitsgericht, ‘BAG’) of 4 May 2022 has further consolidated the standards developed specifically for the distribution of the burden of proof in the context of compensation claims for the performance of overtime by the employee. The burden of proof lies with the employee and cannot be met by giving mere circumstantial evidence (cf. BAG, judgment of 10 April 2013 – 5 AZR 122/12). Following this recent decision, a different result also does not result from the obligation under Union law to introduce a system for measuring the daily working time of the employee. The background to this is the discussion initiated by the court of first instance as to whether the interpretation of the Working Time Directive 2003/88/EC requires that the employee be granted relief in the process concerning the payment of overtime, since the national legislature has not yet sufficiently transposed the Directive. The BAG has now decided that it is up to the federal legislator to decide on the specific design of the system. Moreover, the BAG found that the Directive’s scope is limited to working time law as a regulatory matter of occupational health and safety law, but the Directive does not provide the Member States with any guidelines on remuneration issues. In contrast, it does not affect the burden of proof in favour of employees in overtime compensation proceedings. |