Hot off the press from the BAG on the payment of overtime – Approved, tolerated or operationally necessary? – Good news for employers

On 4 May 2022, the German Federal Labour Court (Bundesarbeitsgericht, BAG) handed down a decision on the payment of overtime that will have a significant impact. The judgment deals with the jurisprudence of the European Court of Justice (ECJ) on the obligation of employers to establish a system of recording working time and makes a clear distinction between working time as a means of protecting the health of workers and working time in terms of the right to payment.

Facts of the Case

The employee was employed as a delivery driver for a retail establishment. His working time was recorded by way of technical recording equipment. The start and end of his working time were set. Breaks were not. At the end of his employment relationship, the claimant sought payment for hundreds of hours of overtime. He claimed that he had worked the whole time (as recorded technically) and could not take breaks because any breaks would not have left him with enough time to make all his deliveries. The employer disputed the overtime.

In a noteworthy (and controversial) decision, the Labour Court in Emden (ArbG) found in favour of the claimant at first instance. The Court held that the employer had an obligation to pay in accordance with the judgment of the ECJ of 14 May 2019 – Case No. C-55/18 – [CCOO]. This judgment – which has become known as the “time clock” judgment – requires the EU Member States to compel employers to establish a comprehensive system of time recording. As a result, the ArbG held that the employer had a direct obligation to measure, record and control the working time of its employees. Any infringement of this obligation by the employer will result in a reversal of the burden of proof: if the employer failed to establish a reasonable system of recording time and fails to control the working time as required by the ECJ judgment, the employee must only plausibly present the number of overtime hours claimed. In contrast, the employer then had to show that the overtime was not worked or was not necessary. In this respect, the ArbG simply brushed aside the settled jurisprudence of the BAG on the allocation of the burden of proof and the burden of producing evidence.

The Regional Labour Court of Lower Saxony (Landesarbeitsgericht, LAG) could not make much of the reasoning of the Court in Emden and essentially dismissed the action. In the view of the LAG, the time clock judgment did not have any impact on the burden of proof and burden of producing evidence in cases involving overtime. A claimant seeking payment for overtime will have the burdens of proof and producing evidence both for the number of hours of overtime and for their necessity.

The judgment

The employee was also unsuccessful in his claim before the BAG. The BAG shares LAG’s view that the judgment of the ECJ in the time clock case does not change anything with respect to the burden of proof and the burden of producing evidence. The central finding: an obligation to measure the daily working time is based on EU law and serves to protect the health of workers. However, it does not have any effect on the principles for the allocation of the burden of proof under German law in a case concerning the payment of overtime. As the claimant was unable to meet these burdens of proof and to produce evidence, there was no payment due for the supposed overtime.

Consequences for practice

The judgment will be a relief for many companies. Given the stir caused by the decision from Emden, the BAG took an important decision of principle. The numerous cases involving overtime necessitated such a decision. Everything remains as it was: employees must provide proof of the overtime worked and when this overtime was worked. They must also show what work they did, and that the employer required, knew about or approved the overtime. Derogating from this principle based on the ECJ judgment required interpretation acrobatics. Fortunately, the BAG clearly rejected the special approach taken by the Court in Emden.

Practical Tips

Employers confronted with claims for payment of overtime must carefully assess whether the claim satisfies the burdens of proof and providing evidence. Deficiencies in the statement of claim should be presented as part of an effective defence in the case – referring to the case law of the BAG, of course. Companies must also ensure that conduct does not imply tacit acquiescence or that managers have not been too quick just to “sign off” on overtime. It remains to be seen (at least until the full judgment is available), what position the BAG has taken concerning the obligation to record working time as part of employee health and safety: does the BAG consider that there is already an obligation to record working time or is action needed by the German legislator for the obligation to apply?

Martin Biebl