In two recent decisions the BAG (Federal Court of Employment) dealt with the virulent topic of overtime payment.

In one case a lawyer working as an associate in a law firm with an annual salary of 80.000,00 € did extra hours over a period of three years expecting to become a partner soon. Becoming a partner did not work out. At the time when he received his termination notice he demanded payment of those accumulated 930 hours of extra time.

In the other case the plaintiff worked as an inventory surveyor in a store house grossing 1.800,00 € monthly. After his employment got terminated, he, too, demanded payment for 968 extra hours gathered in the last two years.

For starters, the number of working hours is normally spelled out in the contract itself. Also collective bargaining agreements are a source of answering the question of how many hours you are supposed to work in return for your salary. In addition, work council agreements, if existent, may deal with various questions concerning the working hour schedule. All provisions have to respect the limits of a special law (so called “Arbeitszeitgesetz”) which basically restricts the daily working schedule to 8 hours but allows for various exceptions.

Those same sources of law (employment contract, collective bargaining agreement, and work council agreement) may stipulate when an employee has to do extra hours and how those hours are compensated. Without such a provision the employee is not required to do overtime absent abnormal or special circumstances demanding urgent action.

In both cases the BAG regarded the provision in the employment contract that dealt with the question of compensation of overtime work as invalid.

The provision in both cases was similar. It roughly read that a) the monthly salary already covers any extra hours that might occur during the course of the month (with regard to the lawyer), and, b) that overtime necessitated by company exigencies does not warrant any extra payment (with regard to the inventory surveyor).

The BAG stated that the fact that both provisions left uncertain the actual amount of extra hours each employee would have to work for without getting additional payment rendered the provision invalid. The BAG reasoned that each employee must be able to ascertain in advance how many hours she has to put into her work for exchange of her salary.

As a consequence of the invalidity of the provision the employer could not take recourse to it and say overtime payment is contractually ruled out. Rather the question of getting those extra hours paid had to be answered by statutory law.

Here, it gets interesting as the Court differentiated between both plaintiffs and came to contrary results.

In a nutshell, the Court stressed extra hours have to remunerated if the employee was justified to have a “reasonable anticipation for remuneration”.

With regard to the lawyer’s claim for compensation, the Court denied such a “reasonable expectation”. Pointing to his considerable income the Court said the lawyer failed to show that it is standard practise that extra hours in his professional circumstances are usually only rendered in exchange for additional payment. It added that the mere hope to join the ranks as a partner was no grounds to merit payment of extra hours done in its pursuit.


According to the BAG, the situation was different for the inventory surveyor in the storehouse. Taking into account of his salary, he had a reasonable expectation to get paid for extra hours.

The decision shows that a contractual provision that with a general brush rules out payment for extra hours is invalid. The employee needs to be given a specific and clear idea how many extra hours such an exclusion rule comprises. Next, the decision drives home that the focus lies on the professional situation and circumstances of the employee, especially the level of income, in determining whether he is justified in entertaining a reasonable expectation to get compensated for extra hours should the provision excluding such compensation happen to be invalid. Especially employees with a high income should make sure that there is a specific provision ensuring payment for extra hours. Finally, when it comes to extra hours, besides their timing and occurrence, it is important to record why they have been “volunteered” in the first place: Necessitated by operational demands and tolerated by the superior or explicitly demanded by the latter.


BAG 22. 02. 2012 - 5 AZR 765/10 (inventory surveyor)

BAG 17.8.2011, 5 AZR 406/10 (lawyer)

Section 3 Arbeitszeitgesetz
http://www.gesetze-im-internet.de/arbzg/__3.html


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