News - Germany

Germany - June 2012

Overtime may be payable contrary to an express contractual provision to the contrary

Employers are obliged to pay additional remuneration for extra hours worked if, in the circumstances, it is expected that overtime will be performed only for remuneration (§ 612 par. 1 BGB (German Civil Code) "BGB").

The facts

The plaintiff had been employed as warehouse manager at the defendant shipping company and received monthly gross remuneration amounting to €1,800.00. Under the employment contract, the parties had agreed on a 42 hour working week. In the event that there would be a requirement to carry out extra work for operational reasons, the plaintiff would be obliged to work without receiving any additional remuneration in respect of the extra work. After finishing employment with the defendant company, the plaintiff claimed compensation for 968 extra hours worked during 2006 and 2008.

The Labour Court dismissed the claim, however, the Higher Labour court upheld it. The Federal Labour Court dismissed the appeal of the defendant. According to § 612 par. 1 BGB, the defendant owed the plaintiff remuneration for the extra hours worked. Considering the amount of the agreed gross remuneration, in the absence of a particular agreed tariff for the work, extra working hours could only be expected to be carried out for additional remuneration. In accordance with § 307 par. 1 sentence 2 BGB, an exclusion of any additional remuneration for overtime in the employment contract was not valid due to a lack of transparency. From the employee’s perspective, the employment contract did not specify particularly what kind of work the employee had to perform for regular gross remuneration. Therefore the plaintiff was not able to understand precisely what would be the position when working beyond his normal hours.

Commentary

Employment contract provisions on overtime should be drafted with as much particularity and details relating to when and in relation to what work overtime will or, perhaps more importantly, will not be payable.

German Federal Labour Court, judgment dated 22 February 2012, file reference 5 AZR 765/10

For further information or to discuss any of the issues raised, please contact Stefanie Andrelang on 0049 89 2422300.