A first step to clarity: Review of ECJ judgment of 19 October 2023,C-660/20 (MK vs Lufthansa CityLine GmbH),ECLI:EU:C:2023:789

2.1 Legal basis: Framework Agreement on part-time work

The judgment is based on the principle of non-discrimination of part-time workers (Clause 4 of the Framework Agreement on part-time work). ² It establishes that ‘in respect of employment conditions, part-time workers shall not be treated in a less favourable manner than comparable full-time workers solely because they work part time unless different treatment is justified on objective grounds’.

The ECJ has not explicitly confirmed that this rule corresponds to Art. 157 TFEU and/or Art. 4 of the Directive on Gender Equality in Employment ³ when these are applied to part-time work. ⁴ It is therefore a bit unfortunate that the ECJ, in order to establish that Clause 4 cannot be interpreted restrictively, has classified that it is ‘simply a specific expression of one of the fundamental principles of EU law, namely the general principle of equality’. Interpreting it within the framework of gender equality and the active promotion of part-time work would have given us a better idea of the specific values and aims of this equality rule. The pending preliminary ruling ⁵ will offer an opportunity to confirm that link.

In any case, the main issue in EU law concerning overtime for part-time workers has never been one of restrictive or broad interpretation, but one of finding the right standard of comparison, the right tertium comparationis for the application of the equality principle. This is the issue on which the ECJ has been failing the national courts for a long time, and on which the German Federal Labour Court (Bundesarbeitsgericht, BAG), with its referral for a preliminary ruling, rather urgently asked for clarification.

2.2 The German discussion on objective justification

The ECJ jurisprudence on overtime pay for part-time workers has largely been shaped by referrals from German labour courts. The first judgment of 1994 (Helmig and Others) ⁶ goes back to joined cases referred by five German courts. ⁷ They were prototypical cases concerning overtime in part-time work; in each of the cases, a collective agreement established that an additional bonus for overtime was only due if the normal daily working time of a full-time employee was exceeded.

The German debate preceding the referrals had started in the 1970s. ⁸ It had always focused on the justification for unequal treatment and analysed possible functions of additional payments for overtime work: Was the payment meant to compensate for extra (physical) demands made on workers, i.e., to protect health and safety of employees? Or was the payment meant to compensate for the restriction on leisure time, to enable workers to organise their leisure time and participate in social life as they wish?

In recent cases, the court has been using a default rule, stating that specific indications in the text of the collective agreement are required in order to assume that the bargaining partners intended to protect contractually agreed leisure time. ⁹ Still, different Senates of the BAG have had a hard time finding common ground. One Senate just recently found that a collective agreement in the public sector put part-time and full-time employees in situations that were qualitatively not even comparable. ¹⁰ Another Senate found, for the typical female part-time of a workload of around 50%, that there were sufficient indications to assume that leisure time was protected, ¹¹ a decision with real economic consequences for businesses that has made it considerably more expensive to have part-time employees work overtime.

It is worth remembering the older debate, because it shows the extent to which Helmig and Others gave the German courts a new start in 1994. Since then, the ECJ has avoided assessments of possible objective justifications for differential treatment, basing its (partly contradictory) judgments on questions of the standard of comparison only. As a consequence, the controversies in Germany also shifted to these questions, leading to an unproductive exchange of opinions rather than arguments. The ECJ judgment in Lufthansa CityLine is designed to finally get back to more substantive issues.

2.3 The confusion created by the ECJ

Before Lufthansa CityLine, there were basically three ECJ judgments on the issue, all of which were mentioned by the German Federal Labour Court in its referral.

In Helmig and Others, the ECJ set the scene by limiting its reasoning to the statement that there was no difference in treatment, given that, after all, for the same number of hours, part-time workers received the same ‘overall pay’ as full-time workers. ¹²

The Elsner-Lakeberg judgment of 2004 concerned a case in which the first three hours of overtime work were not remunerated with the additional overtime bonus, i.e., a case with a threshold of three hours that had to be met for accessing an overtime bonus. It would have been easy for the ECJ to establish difference in treatment with the Helmig test, given that Ms Elsner-Lakeberg received a lower rate of overall pay for the same number of hours as full-time colleagues. Instead, the ECJ used a different criterion to achieve the same result, indicating that it intended to distance itself from the Helmig formula. This intent was confirmed with the new formula: ‘genuine transparency permitting an effective review is assured only if [the principle of equal pay] applies to each aspect of remuneration granted …, excluding any general overall assessment of all the consideration paid to workers’ (emphasis added). ¹³

Although the payment for additional hours (one ‘aspect’ of the overall remuneration) was triggered for everyone indiscriminately after three additional hours, the ECJ now argued that this resulted in less favourable treatment of part-time workers because ‘a greater burden’ was being placed on part-time teachers in reaching this threshold. The Court put the threshold in relation to the contractual monthly hours and found that it amounted to 5% extra working hours compared to only 3% for full-time workers. ¹⁴

With the judgment in Voß, of 2007, ¹⁵ things got confusing. In this case, the hours worked over and above individual contractual working hours were classed as overtime, but were paid at a lower rate than ordinary working hours. In sum, part-time workers received a lower ‘overall pay’ than full-time employees for the same number of hours worked. Here, contrary to Elsner-Lakeberg, the ECJ again relied on Helmig. Its attempt to harmonise with the Elsner-Lakeberg decision failed. In Voß, the ECJ used its ‘examination of the remuneration components’ only as an explanation of how the total remuneration was calculated, but not as an independent standard of comparison. It even misinterpreted its own decision in Elsner-Lakeberg by stating that it had established unequal treatment on the basis that ‘for an equal number of teaching hours worked, part-time workers were less well paid than full-time workers’ ¹⁶ – a statement that does not render the 2004 argument correctly.

Nevertheless, the BAG, after having first followed Helmig and then happily taken up the Elsner-Lakeberg formula, mostly continued to orientate itself on Elsner-Lakeberg (for which Voß provided arguments ¹⁷ ), while numerous lower courts reverted to Helmig, comparing the overall pay (for which Voß provided even better arguments). ¹⁸

2.4 The reference for Lufthansa CityLine

Against this background, the BAG considered ‘the assumption that the legal situation has been clarified’ no longer justified. The referral in Lufthansa CityLine was meant to give the ECJ the opportunity to harmonise its jurisprudence. ¹⁹

MK was a pilot employed on a part-time basis (working 90% of full-time hours) by Lufthansa CityLine GmbH. His working time consisted of flight duty time, but also administrative tasks, invoicing of in-flight sales, standby periods or passenger assistance. Working part-time meant that he was granted an additional 37 days of leave per year. In order to access a bonus for additional (overtime) flying duty hours, the collective agreement stated that he had to meet the same trigger thresholds of an absolute number of monthly flying duty hours as a full-time pilot. ²⁰

As the BAG showed, the Helmig/Voß comparison of ‘overall pay’ would result in an assertion that full-time workers and part-time-workers were treated alike: the same number of hours resulted in the same payment. Applying the Elsner-Lakeberg comparison of each aspect of the remuneration (the BAG's preference) could, however, lead to a different result, given that the threshold for part-time workers in accessing the bonus was not reduced in proportion to their individual working hours. ²¹

3.1 Difference of treatment

In its judgment, the ECJ basically agreed with the BAG on the issue of tertium comparationis. It used the Elsner-Lakeberg test yet solely cited Elsner-Lakeberg as a reference. Consequently, the ECJ completed ‘an examination of the elements of the remuneration of the workers concerned’ and analysed, referring ‘by analogy’ to Elsner-Lakeberg, the threshold in relation to the total individual working time. Based on the finding that part-time workers would be much less likely to satisfy the conditions for the additional remuneration, the ECJ considered the relatively different thresholds ‘a greater burden’ for part-time pilots than for full-time pilots, having ‘a negative impact for part-time pilots in terms of the relationship between the service provided and the consideration for it’.

3.2 Justification of the difference

The BAG referral had also challenged the ECJ to finally elaborate on the possible justifications for less favourable treatment of part-time workers. The BAG had found – by way of an interpretation of the collective agreement – that the overtime bonus was meant to compensate for the additional workload and health risk posed by overtime, thereby also disincentivising airlines from using overtime excessively.

The ECJ approached it at a different angle. It did not explicitly confirm that health protection is a generally appropriate objective that could justify the unequal treatment in these cases, but rather questioned the empirical assumptions underlying the collective agreement as interpreted by the BAG. The ECJ found that the rule for the overtime bonus at hand did not comply with the requirements of ‘precise and specific factors’ and ‘objective and transparent criteria’, that would ‘ensure that that difference in treatment in fact responds to a genuine need, is appropriate for achieving the objective pursued and is necessary for that purpose’. Firstly, it lacked ‘objectively determined values or scientific knowledge, or […] general experimental data’ that would show the additional risks to the pilots’ health. Secondly, the measures taken may not be ‘appropriate and consistent’, given that ‘a system of recovery of working hours or days off, or the fixing of thresholds of flying duty hours per week rather than per month’ might better achieve the stated objective. Thirdly, it considered that setting uniform thresholds was obviously ‘at odds with the objective of dissuading airlines from making pilots work excessively, in the case of part-time pilots’.

The ECJ thereby also addressed the questions that the BAG had been planning to deliberate itself, namely, whether the concrete design of the rule serves a genuine need of the company and is appropriate and necessary for achieving this objective. ²²

4.1 ‘Less favourable’: an inconclusive starting point

The ECJ complied with the task before it; the arguments for finding less favourable treatment in the case are stated with utmost clarity, including a clear reference to the Elsner-Lakeberg test. ²³ It is now sufficiently clear that the ECJ no longer defends the decision in Helmig and Others, i.e., difference in treatment can no longer be denied with the argument that the overall pay for the same number of hours is the same. ²⁴

However, it is still not clear if Lufthansa CityLine is to be understood as meaning that only the individual components of the remuneration are to be compared. Has the Helmig/Voß test simply been considered inadequate for this and similar cases, or could unequal treatment still be established by comparing the overall pay, at least in cases similar to the Voß case, where less favourable treatment was apparent just by looking at the overall pay? In other words, has Voß been decided by the wrong standard? Or can the two standards be applied alternatively? This was the opinion of AG Ruiz-Jarabo Colomber in Voß, who stated that ‘those two criteria, far from being contradictory, complement one another and in each case their application depends on the circumstances of the case. There is no discernable order of priority.’ ²⁵ Although the pending preliminary ruling (KfH) could again be decided on the Elsner-Lakeberg test alone, it would be helpful if the ECJ used the case to clarify this issue.

With good reason, the ECJ has been criticised for avoiding substantive assessments of the level of objective justification. ²⁶ Using both standards alternatively would be a way of avoiding this. This alone is a strong argument in favour of the two standards complementing each other. The ECJ has been approaching the question of less favourable treatment as a rather formal test. ²⁷ However, a choice between simple ‘mathematical exercises’ ²⁸ obscures the underlying normative decisions; substantive reasons are hidden behind a seemingly neutral terminology. The arbitrariness of such choices is reflected in the German debate, where some scholars are outraged by the Lufthansa CityLine judgment, stating that full-time employees will now be disadvantaged, ²⁹ while others hold that this is exactly what equal treatment means. ³⁰ Such empty evaluative statements are based on preconceived understandings of equal treatment; they block the way to substantive considerations. As long as establishing difference in treatment is a rather formal exercise, any method that establishes difference in treatment should be good enough, and every such difference will have to be justified.

4.2 Objective justification?

Lufthansa CityLine is also bound to have a significant impact on the issue of objective justifications for less favourable treatment of part-time workers in overtime payment. This is the first time the ECJ (finally!) has taken a stand on these questions.

Considering the ECJ's former reservist approach in dealing with these issues, the degree of detail surprises. As for the case at hand, the ECJ has shown itself to be unconvinced of the existence of a genuine need for payment that could legitimise differential treatment of part-time workers. It found the empirical assumptions in respect of the specific health risk as well as the appropriateness of the monetary compensation to be implausible. It reached this conclusion by a more or less complete evaluation on all levels of the test for justification ‘on objective grounds’; it ended up developing the concept in all its components as an autonomous concept under European law (genuine need, appropriateness for achieving the objective, necessary for that purpose, objective consistently pursued). The national courts have been left with little more than the application to the case.

There are three issues that should be highlighted specifically. Firstly, as noted by the BAG (and as is common with such norms), the collective agreement does not explicitly mention any possible objectives for the payment. Therefore, the BAG judgment had given a rather detailed interpretation of the collective agreement in order to ascertain the objectives for the provision of additional overtime pay. However, instead of relying on this interpretation, the ECJ looked at the arguments of employer and the German Government according to ‘the file before the Court’ – and called on the BAG to verify that. ³¹ It seems the ECJ is not convinced of the method used by the German courts to interpret collective agreements when it comes to EU law.

Secondly (and unlike AG Emiliou) ³² the ECJ did not hesitate to question the collective agreement or the assumptions on which it is based. ³³ This almost looks like a belated statement on an issue the BAG had referred to the ECJ two years ago. There is a rather heated legal debate in Germany on the question how far collective agreements have to comply with a strict legal understanding of equality. Many labour lawyers hold the view that the fundamental right to freedom of collective bargaining (Art. 9(3) of the German Constitution or Grundgesetz (GG) and Art. 28 EU-CFR) establishes a prerogative for the social partners to set objectives and make empirical assessments. ³⁴ When explicitly presented with the question in relation to the general equality principle (Art. 20 EU-CFR), the ECJ held that EU law was not applicable (Art. 51(1) EU-CFR). ³⁵ However, the ECJ decision in Lufthansa CityLine will have a role to play in the constitutional complaint on this issue pending before the BVerfG. ³⁶

Thirdly, when critising the uniform trigger thresholds for the overtime payment in Lufthansa CityLine, the ECJ also noted that the same workload may have quite different repercussions for workers, referring to ‘the very reasons’ for part-time work, ‘such as possible non-work-related burdens’. ³⁷ This remark is of particular importance with regard to the context of anti-discrimination law (on which the pending preliminary ruling (KfH) ³⁸ is based). The ECJ has rightly called for the burden of unpaid care work to be taken into account. Contrary to what labour lawyers have argued, ³⁹ this would not make the employer accountable for their workers’ private affairs, but rather respect the basis of what has contractually agreed between the parties: protected time off employment, in most cases based on an understanding of the social division of labour between men and women. The protection of ‘leisure’ time ⁴⁰ (or rather, time not contractually dedicated to the employer's business) will have to be considered the default objective of additional overtime pay in the future.