Supreme Court: Overtime Work Can Exist Without Employer’s Resolution or Written Request

Recently, the Supreme Court of the Republic of Serbia, in Ruling no. Rev2 3092/21 dated June 22, 2023, took the stance that for the existence of overtime work, it is not necessary for there to be a written request or resolution by the employer to introduce overtime work. Therefore, staying longer at work to complete tasks that by their nature had to be done on the same day constitutes overtime work.

Below we analyze the reasoning behind the ruling.

Case Circumstances

• The plaintiff worked as the head of a bank branch, with working hours from 9 am to 5 pm, Monday to Friday.
• The job in the defendant bank's branch was organized such that customer dealings occurred during the stated working hours, while after 5 pm, tasks that could not be completed during working hours were performed (counting and organizing money and orders, printing journals and accounting cash balances, comparing actual and accounting cash balances, reviewing each order individually, counting money, signing the journal, refilling ATMs, and similar tasks).
• The defendant bank kept attendance records only for the eight-hour workday, while the plaintiff kept records of work performed after 5 pm.

Court Decisions

The first-instance court rejected the plaintiff's claim, reasoning that the work was not performed at the explicit, written request of the defendant, and therefore could not be considered overtime work.

The second-instance court overturned the first-instance decision and upheld the plaintiff's claim, reasoning that the plaintiff worked longer than the full working hours during the disputed period and that after the end of working hours, she worked on specific tasks that had to be performed after working hours.

The Supreme Court confirmed the second-instance decision while deciding on the revision, an extraordinary legal remedy, with the following reasoning.

According to the Labor Law (“LL”), the following is prescribed:

• Full working hours amount to 40 hours per week unless otherwise specified by this law (Article 51, paragraph 1);
• At the employer's request, the employee is obliged to work longer than full working hours in cases of force majeure, sudden increase in workload, and other cases when it is necessary to complete a job that was not planned within a certain timeframe (overtime work), which cannot last more than 8 hours per week, nor more than 4 hours per day (Article 53);
• The employer may reschedule the working hours when required by the nature of the activity, organization of work, better utilization of means of work, more rational use of working hours, and completion of a specific job within set deadlines (Article 57, paragraph 1);
• Rescheduling of working hours is carried out so that the total working hours of an employee in a period of six months within a calendar year do not exceed the average full working hours, and in the case of rescheduling working hours, the working hours cannot exceed 60 hours per week (Article 57, paragraphs 2 and 5);
• The employee is entitled to increased salary in the amount determined by general acts and the employment contract for overtime work of a minimum of 26% of the base (Article 108, paragraph 1, point 3).

The Supreme Court states that for overtime work to oblige the employer to pay increased salary, it is necessary for the employee to have stayed to work overtime at the employer’s request, as well as for extended work hours to be a regular way of working at the employer during a specific period.

The Court further concludes that for the existence of overtime work, it is not necessary to have a written request or resolution by the employer to introduce overtime work, as extended stays at work without a written order from the employer (with the employer's understanding that daily updates are required, even if it can only be achieved by work after working hours) can have, as it did in this case, the character of overtime work.

This is especially considered in relation to the nature of the activity and the organization of work at the employer, as well as the specifics of the job performed by the employee. The tasks performed by the plaintiff as the head of the branch are such that they are not performed during regular working hours but after their completion, as they represent a kind of reconciliation of everything done that day.

Furthermore, in this case, the defendant bank did not prove that it carried out a rescheduling of working hours during the disputed period.

Conclusion

The Supreme Court concludes that the organization of the employer's business activities in such a way that it implies (expects) daily engagement of certain tasks that can only be performed after working hours, without rescheduling of working hours or a written order for overtime work, with the position that employees in such circumstances are not owed increased salary for overtime work, contradicts the principles of equality of parties in an obligation relationship (which, based on Articles 23 and 25, paragraph 3 of the Law on Obligations, also apply to labor law matters), namely: good faith and fairness, prohibition of abuse of rights, and increased diligence (diligence of a good expert), in accordance with which the employer is obliged to act in fulfilling obligations from its professional activity.

Therefore, the absence of a written order for overtime work in a situation where employees are expected to complete all tasks that by logic can only be done after working hours, cannot be used to the detriment of the employee.

On the other hand, the right of the employee to compensation for work performed, even if it is work performed after working hours, should not be in question, but the issue of the amount of such compensation can be rightfully questioned. In other words, does the employee in this situation have the right to 100% of the salary amount for the hours worked after regular working hours, or does he also have the right to increased salary for overtime work at a total rate of 126%? This is especially relevant considering that in the described circumstances, the legally prescribed conditions for the existence of overtime work (suddenness, unplanned, urgency) are not met.

Since the regime of overtime work is an exception to full working hours, the provisions of the LL on overtime work should be narrowly interpreted. In other words, this special regime should be applied only when all prescribed conditions are met, so the total number of working hours in one day does not constitute an overtime regime by itself, if there are no special qualifying circumstances.

From a practical standpoint, it is particularly contentious that the competent Ministry previously took the position that in the analyzed circumstances, the employee is entitled to compensation for hours worked beyond regular working hours, but not to an increase based on overtime work.

Specifically, when the schedule of working hours is determined for performing tasks that are planned in advance and have not arisen as a result of force majeure or a sudden increase in workload, but are regular tasks, the hours that appear on a monthly level as work longer than full working hours do not constitute overtime work (Opinion of the Ministry of Labor, Employment and Social Policy number 011-00-00346/2013-02 dated December 6, 2013).

It remains to be seen whether there will be changes in the judicial practice on this issue in the future.