CJEU: Case. C-514/30, Koch Personaldienstleistungen, 13 January 2022

The EU Court of Justice has just found in favour of a German temporary worker, who was claiming an overtime payment of 72.32 euros from his employer, in a decision that will cost companies dear, not only in Germany but in all likelihood, in other countries, too. The temporary worker worked 13 days in August 2017, corresponding to 121.75 hours, then took ten days of paid leave, rather than completing 84.7 hours of work if he had not taken this leave. The applicable collective bargaining agreement provides for an additional allowance of 25% in respect of overtime hours worked beyond the threshold of 184 hours work in one month. The employer applied this provision of the agreement strictly, and did not pay the additional allowance for the month of August, arguing that the employee had actually “worked” 121.75 hours during that month. As leave is paid on the basis of equivalence to hours worked, it does not take account of any hours not actually “worked”. For his part, the temporary worker argued that the 84.7 hours that he would have completed if he had worked should be included in the calculation, and thus added to the 121.75 hours that he did actually work, making a total of 206.45 hours, thereby triggering payment of the 25% overtime supplement for the 22.45 hours completed over and above the threshold of 184 hours. The Federal Labour Court to which the temporary worker took his case – after losing twice before lower courts – asked the Court of Justice to rule whether Article 31, paragraph 2, of the Charter of Fundamental Rights of the European Union, and Article 7 of Directive 2003/88/EC concerning the organisation of working time (see Annual Leave) “must be interpreted as precluding a provision in a collective labour agreement under which, in order to determine whether the threshold of hours worked granting entitlement to overtime pay is reached, the hours corresponding to the period of paid annual leave taken by the worker are not to be taken into account as hours worked”. The Court of Justice notes that the exercise by the temporary worker “of his right to leave had the effect that the remuneration received for August 2017 was lower than that which he would have received if he had not taken leave during that month” (paragraph 38). It holds that “a mechanism for accounting for hours worked […] under which taking leave is liable to entail a reduction in the worker’s remuneration, which is reduced by the supplement provided for overtime actually worked, is such as to deter the worker from exercising his or her right to paid annual leave during the month in which he or she worked overtime” (paragraph 40). However, nothing should deter an employee from taking some or all of his or her four weeks of paid annual leave. This is both a matter of health and safety and, as a “principle of EU social law, [is] not only particularly important, but is also” laid down in the Charter of Fundamental Rights of the European Union.
(article published in IR Notes 178, 26 January 2022)