Luxembourg: Overtime vs Senior executive
On 15 December 2016, the Court of Appeal ruled on the classification of senior executive and the right to claim overtime pay. An employee employed as a mechanic in 1991 was assigned to the sales department of the employer’s garage as a salesperson in 2001, before being promoted to head of sales in March 2012. Then, through a new addendum to his employment contract in July 2012, the employee had once again been named a mere salesman. The contractual relations were terminated by mutual agreement through an agreement of 3 April 2013 with effect from 30 April 2013.
In the courts, the employee claimed from their former employer the payment of an additional 629.19 overtime hours for 2011. The employer rejected this request on the grounds that the employee was a senior manager at that time.
In handing down its ruling the Court of Appeal referred to Article L. 162-8 of the Labour Code, which defines the conditions to be fulfilled in order to be a senior executive, recalling that when the status of senior executive is disputed by the employee, the proof of the status is the responsibility of the employer.
The Court therefore reiterates these legal conditions, while specifying that they are cumulative:
1. The salary received must be significantly higher than that of employees covered by the collective agreement or “scaled” by other means, taking into account the time required to perform the duties.
In this case, the Court noted that according to the employee’s salary statements, the latter received a fixed hourly wage corresponding to the minimum social wage for skilled workers. Moreover, their high pay was due to the premiums and commissions earned on the large number of vehicles sold, while other dealers also benefited from this commission system as is customary in car sales. Evidence of a significantly higher wage was therefore not provided by the employer.
2. The employee must exercise effective directive power
In this case, the Court noted that the employer merely produced flowcharts and job descriptions without proving that they actually applied them. It also found that the responsibilities assumed by the employee according to the certificates produced, namely the supervision of a sales team, the checking of purchase orders and the ordering of cars, are not such as to establish true directive or decision-making power, and nor was the signing of a single request for leave by a team member in the absence of a hierarchical superior.
3. Or the employee must have a wide-reaching independence in the organisation of work and broad freedom regarding work schedules, particularly the absence of constraints concerning working hours.
In this case, according to the testimony produced, the employee had to be present outside the garage’s opening and closing hours to place orders without being disturbed by customers and calls, all at the request of the employer. In addition, the employee must clock in and clock off as shown by the monthly copy of hours worked by staff.
In these circumstances, the Court of Appeal concluded that the employee’s claim for overtime was well founded, as the employer had failed to prove their alleged status of senior executive. The employer had to pay the employee the sum of EUR 11,011.70 as overtime for 2011.