Germany: Federal Labour Court on the Burden of Proof in Litigation regarding Remuneration for Overtime
Three years ago, the European Court of Justice (ECJ) caused “an earthquake” in working time law by calling for an “objective, reliable and accessible system” for recording working time throughout the member states of the European Union (14 May 2019 – C-55/18). In Germany, the legislator will have to implement the ruling by amending the German Working Time Act (Arbeitszeitgesetz). This has not happened yet. However, it has been debated whether employers should or even have to introduce working time recording already before the local law is amended, for example to gain control of how much overtime is worked by the employees and avoid litigation on remuneration for such overtime.
The discussion was fueled by the local labour court of Emden, Germany, which took the ECJ ruling as an opportunity for some surprising rulings concerning working time. The court ruled already in September 2020 that employees claiming remuneration for overtime must only show when they worked, but – because of the ECJ ruling – must no longer demonstrate that the employer positively knew about the overtime. The labour court in Emden reasoned that employers were able to obtain knowledge of the working times by inspecting the working time records, which they are obligated to monitor/control according to the ECJ. The court did not follow the employer’s argument that he did not check any working time records due to applying trust-based working time. After the second instance court of Lower Saxony had already overturned this ruling of the labour court Emden, a recent ruling of the Federal Labour Court (4 May 2022 – 5 AZR 359/21) as the highest German court for employment law topics now brings additional clarity for employers. The Federal Labour Court ruled that the previous principles on the burden of proof in overtime litigation remain in place despite the 2019 ECJ ruling.
The case before the Federal Labour Court concerned a delivery driver who filed a claim for remuneration for overtime in the amount of EUR 5,200, referring to electronically created time records showing the overtime worked. The local labour court in Emden had approved the claim, with the arguments laid out above. However, the second instance court and now also the Federal Labour Court did not follow these arguments and dismissed the court claim. The Federal Labour Court clarified that previous principles, in particular with regard to the burden of proof in overtime proceedings, remain in place despite the ECJ ruling. In particular, the employee must still show and – if disputed – prove that the employer has ordered or approved the overtime worked. Such approval is also assumed if the employer was aware of the overtime being performed and tolerated it due to the necessity from the company perspective. In the case at hand, the delivery driver failed to fulfil this burden of proof, which is why his claim was dismissed. The working time records he presented were not considered sufficient by the Federal Labour Court to sustain the claim for overtime pay. According to his records, the driver had never taken any breaks, without being able to explain this more specifically and without being able to demonstrate why the hours worked were required considering his workload and to what extent the employer was aware of these circumstances.
The ruling brings clarity in favor of employers. The burden of proof for employees in overtime proceedings remains considerable, as they must continue to prove that they have worked overtime and that this has been ordered or at least approved by the employer. In practice, this often poses a challenge for employees. However, an amendment of the Working Hours Act implementing the 2019 ECJ ruling is not off the table but is still to be expected. Depending on what standards the law will set for employers in the future regarding working time recording, the burden of proof in overtime proceedings may also become subject to change.
Key Action Points for Human Resources and In-house Counsel
- The principles regarding the burden of proof in overtime proceedings remain in place. Therefore, it remains difficult for employees to successfully claim overtime compensation, as they must not only show that they worked overtime but must also be able to demonstrate that the employer was aware of the overtime and instructed or (conclusively) approved it.
- The ECJ ruling on the recording of working time currently has no direct impact on German employment law. It remains to be seen how local law will be adjusted to comply with the ruling.