EU Charter of Fundamental Rights cannot be Invoked Against a Collective Bargaining Agreement regarding Overtime Pay
Author: Chris Van Olmen
The Court of Justice of the EU recently decided, in a preliminary ruling, that a collective bargaining agreement (CBA) which provides for a lower supplementary pay for regular night work – than for irregular nightwork, is not implementing the Working Time Directive and therefore does not fall within the scope of the EU Charter of fundamental rights.
The German Federal Labour Court posed preliminary questions to the CJEU concerning the compatibility of a company-level collective agreement between Coca-Cola and a trade union with the Working Time Directive and the EU Charter of Fundamental Rights.
The collective agreement established a higher supplementary pay for irregular night work than for regular night work, the underlying reasoning being firstly, that these irregular situations generally involved additional work for employees who usually kept to day work. In addition, Coca Cola reasoned that regular night work already gave rise to an entitlement to additional benefits, particularly in terms of leave. With the supplementary allowance for irregular night work, they intended to both compensate the difficulty of the work and to deter the employer from too often resorting to it and ‘spontaneously encroaching on its employees’ leisure time and social lives’.
Two employees, however, invoked the principle of equal treatment before the law. They maintained that employees who regularly perform night work are exposed to significantly greater health risks and disruptions to their social environment than those who perform night work on an irregular basis. According to them, to conclude a collective agreement that awards supplementary pay for inconveniences regarding night work to irregular night workers, but not regular, creates a situation of unequal treatment, contrary to German law as well as the principle of equality in article 20 of the EU Charter.
Under Article 51(1) of the Charter, its provisions are addressed to the Member States only when they are implementing Union law and, in accordance with settled case-law, the concept of ‘implementing Union law’ presupposes a degree of connection between an act of EU law and the national measure at issue, which goes beyond the matters covered being closely related or one of those matters having an indirect impact on the other. In other words, to see whether the employees can invoke the principle of equality in art. 20 of the Charter, the CJEU must find a connection with EU law, otherwise the case does not fall within the scope of the Charter. Therefore, the CJEU examined whether the CBA about supplementary pay was implementing the EU Working Time Directive. The Court recalled that the relevant EU legislation, including the Directive, does not apply to the remuneration of workers, even if there are articles concerning specific measures for night workers in the Directive. Remuneration is excluded from the competences of the EU by Article 153.5 TFEU. Consequently, the pay provisions for night work in the CBA are not covered by the Directive and cannot be regarded as implementing Union law for the purposes of the Charter, which means that the CJEU cannot make an assessment on whether the CBA violates article 20 of the Chart (the principle of equality).
The decision on the merits of the case is still up to the German Federal Labour Court.
Key Action Points for Human Resources and In-house Counsel
- The EU Charter of Fundamental Rights has a limited scope of application. When it is invoked by employees, the first important step is to see whether the case has an actual connection to EU law. If not, the Charter cannot be invoked.
- Remuneration is excluded from EU legislative competences. The EU Working Time Directive does not include any provisions regarding remuneration and therefore, it us up to the national courts to decide on cases relating to remuneration.