Last week, Søndre Østfold District Court handed down a ruling in a case where a part-time shop assistant claimed overtime pay for work performed beyond the agreed employment percentage. The majority of the court found that the employee had been subjected to unequal treatment during the period in which he was employed in a permanent part time position, and awarded the employee compensation for the lack of overtime payment.
The Federation of Norwegian Enterprise, Virke, which assisted the employer in this case, has indicated that it will appeal the ruling.
Let us take a closer look at the ruling and what it could mean for your business.
Case background
The employee worked as a shop assistant at Coop Øst SA. He started out as an on-call assistant before being offered a permanent position. However, the employee did not want a permanent position, as he was considering further studies and therefore wanted flexibility in terms of his workload. He therefore started in a permanent part-time position, initially working 10% full time, then 20% and finally 60%.
During his employment, the employee wanted to work more than his agreed employment percentage, and the employer therefore offered him extra shifts when needed. The hours worked beyond the agreed percentage were paid at the normal hourly rate, without overtime pay, as long as they did not exceed the overtime limits set out in the National Collective Agreement Virke- HK (Landsoverenskomsten HK).
The employee argued that all hours worked beyond his agreed employment percentage should have been paid with an overtime supplement and brought the case before the district court. The employer, on the other hand, argued that part-time employees are only entitled to overtime pay when they work more than normal working hours in accordance with the Working Environment Act (WEA), the National Collective Agreement and the individual employment contract.
The issues in the case and the Court's assessments
The case raised the question of whether the employee was entitled to overtime pay for work beyond the agreed employment percentage, but within the limits of normal working hours according to the Working Environment Act, § 10-6, cf. § 10-4 and the National Collective Agreement.
The disputed issues related to the interpretation of the employee’s employment contract and WEA § 10‑6, viewed in conjunction with the protection against discrimination for part‑time employees in WEA Chapter 13 and the EU Part‑Time Work Directive.
The court was divided into a majority and a minority. The majority placed decisive weight on recent case law from the EU Court, which has held that it is contrary to the prohibition of discrimination in the Part-Time Directive to have a common threshold for overtime pay for part-time and full-time employees. The majority considered that the employee was subject to differential treatment in that his threshold for overtime pay was not adjusted in proportion to the agreed fraction of a full-time position in his part-time job.
The majority further found that the employer had not demonstrated legitimate reasons that could justify the differential treatment, despite the employer's argument that Norway has a strong full‑time culture and that this constituted a legitimate reason for maintaining a uniform overtime threshold for all employees.
The majority therefore concluded that the employee was entitled to compensation, and that the claim for compensation had to be calculated retroactively to the time when the discrimination took place, not just from the time when the EU Court handed down its decisions.
The minority of the court held that the employer's overtime scheme did not result in unequal treatment and therefore did not constitute discrimination under § 13-2 of the Working Environment Act. On this basis, the minority held that the employee was not entitled to compensation. In any event, the minority argued that any compensation should be limited to the period after the EU Court changed its earlier case law.
The court unanimously concluded that the employee had not been subjected to differential treatment during the period he was on call, as he had not worked beyond his agreed working hours during that period. This was because, as an on-call employee, he did not have fixed working hours to exceed.
In the judgment, the employee was awarded NOK 205,340 in compensation and holiday pay for the period he was in permanent part-time employment.
What significance could the judgment have?
The Federation of Norwegian Enterprise, Virke, which assisted the employer in the case, has announced that it will appeal the judgment. The judgment is therefore not yet final. A similar case is being heard in another district court, and it is possible that final clarification will only be reached if the questions are brought up before and considered by the Supreme Court.
The Ministry of Labour and Inclusion has appointed a working group to assess how Norway should respond to the recent practice of the EU Court. The working group is to submit a report by 1 September this year.
Our recommendation
We recommend that employers carry out a systematic survey of part-time employees who regularly work beyond their agreed percentage of employment and assess whether current employment contracts and shift arrangements should be adjusted because of the uncertainty caused by the ruling.
Please feel free to contact us if you have any questions about what the ruling may mean for your business.
