The Court of Justice of the European Union (“CJEU”) recently had to deal with a reference for a preliminary ruling from the Federal Labour Court in Germany (Bundesarbeitsgericht) concerning the prohibition of indirect gender discrimination and the prohibition of treating part-time employees less favourably than comparable full-time employees.

The preliminary question was preceded by escalating litigation. The defendant provides outpatient dialysis services throughout the Federal Republic of Germany. The action was brought by two female nurses employed by the defendant on part-time basis, who sought in their application to be paid the additional payments, to which they claimed they were entitled for time worked in excess of their part-time hours, and compensation for damage under the General Equality Act, as the defendant’s part-time workforce was predominantly female and it therefore also constituted indirect gender discrimination.

The trial court dismissed the action and the applicants appealed. The Court of Appeal ordered the defendant to pay the applicants the appropriate overtime premiums, but rejected the claim for damages. The applicants lodged a further appeal seeking that compensation. The defendant also appealed against the obligation imposed by the court. The Federal Labour Court has now referred a preliminary question to the CJEU.

The referring court asked the CJEU whether a national collective agreement, which provides that overtime premiums are to be paid only for hours worked in excess of the normal working hours of full-time employees, gives rise to a difference in treatment between full-time and part-time employees. Should the CJEU conclude that indirect discrimination is involved, the question of how to determine the impact of this measure on women must be addressed. Specifically, it addresses whether the gender ratio should be monitored only in the group of part-time employees or whether full-time employees should also be taken into account. The referring court also considers whether the difference in treatment regarding overtime premiums can be justified by a legitimate aim, such as the desire to discourage employers from overloading employees with overtime work while preventing less favourable treatment of full-time employees.

The CJEU ruled that national legislation is “less favourable” to part-time workers if overtime pay is paid only for hours worked in excess of the full-time worker’s normal working hours.

National legislation constitutes indirect gender discrimination if it can be shown that it disadvantages a significantly higher percentage of women than men. However, it is not necessary to take into account the proportion of women and men in the group of full-time employees, which is not affected by this legislation.

The less favourable treatment of part-time employees and the discrimination referred to cannot be justified by the pursuit of the objective of discouraging employers from ordering employees to work overtime beyond the individually agreed working hours in the employment contract. Nor does the CJEU see as a defensible objective to prevent full-time employees from being treated less favourably than part-time employees.

According to the CJEU, the aim of discouraging the employer from ordering overtime rather leads to the opposite effect when a uniform threshold is set, from which overtime is counted for both part-time and full-time employees. The second objective of preventing less favourable treatment of full-time employees is also misguided. If part-time workers were entitled to overtime pay from the first hour that they work beyond their individually agreed working hours, this would compensate more for unfairness and ensure fairer treatment.

The CJEU concludes that the objectives described above do not constitute an objective reason that could justify a difference in treatment. The concept of “objective grounds” under clause 4(1) of the Framework Agreement requires that the difference in treatment be justified by specific and clear facts relating to the working conditions in the given context. These reasons must be objective and transparent in order to ensure that the difference actually corresponds to a real need, pursues a legitimate aim and is necessary.

This judgment could also have an impact on the Czech Republic, as Czech law provides that overtime cannot be ordered for employees with shorter working hours, and only work worked in excess of the fixed weekly working hours is considered overtime. In the view of the CJEU, such an arrangement could also be considered “less favourable” for part-time workers if they are in a comparable situation to full-time workers.