Uber must pay out unpaid overtime to the former executive assistant at its Amsterdam headquarters. That was the verdict of the Amsterdam Court of Appeal in an important ruling that shows how failing to keep time records of working hours can cost an employer dearly.
Just like registering outstanding holidays properly, it is also important that timekeeping of working hours is done correctly. In 2019, the European Court of Justice ruled that the EU Working Time Directive requires member states to impose an obligation on employers to “set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured”. In the Netherlands, this is implemented by the Working Hours Act. Section 4.3 of the Working Hours Act requires employers to “keep proper records of working time and rest periods“. The Act however does not apply to employees earning more than three times the statutory minimum wage (the exemption clause). The recent ruling of the Amsterdam Court of Appeal makes it clear that failure to keep proper records of working hours can cost an employer, in this case, Uber, dearly.
What was at stake in this case?
The employee joined Uber on 1 December 2014 for 40 hours per week at a gross monthly salary of €4,350, excluding an 8% holiday allowance and other remuneration. The employment contract is governed by Uber’s handbook. The handbook states, in brief, that the employee is required to work occasional overtime at weekends or on public holidays when necessary for the proper performance of the job. The remuneration for the overtime is deemed to be included in the salary. On 30 November 2016, the employee resigns by telephone. By email dated 16 December 2016, she confirms her resignation with effect from 31 January 2017. The employee then reported sick on 22 December 2016. By letter from her authorised representative dated 15 March 2017, Uber was requested, among other things, to pay overtime in the amount of € 120,994.– gross. In addition, the employee held Uber liable for damages suffered as a result of her health complaints. By letter dated 2 May 2017, Uber refused to comply with this request.
Ruling Amsterdam Court of Appeal
First, the Amsterdam Court of Appeal found that Uber should have complied with the obligation to keep proper time records under Section 4.3 of the Working Hours Act, as the employee’s salary was less than three times the minimum wage. However, Uber failed to keep records of the employee’s hours worked, despite its legal obligation to do so, the court said. Since Uber did not verify the number of hours claimed by the employee after it was first confronted with a claim for overtime pay, and merely stated in general terms that the hours calculated by the employee could not be correct, it did not, in the court’s view, refute the hourly figures substantiated by sufficient reasons. As the parties had expressly agreed that overtime was to be included in the salary, not all the hours claimed were compensable. The court set a reasonable number of overtime hours at the maximum allowed by the Working Hours Act, namely 48 hours per week. All hours claimed by the employee in excess of this are eligible for compensation, including a statutory premium of 15%. Furthermore, the court concluded that the employer had breached its duty of care and was therefore liable to the employee by allowing the employee to work more hours than required by the Working Hours Act. The requested declaratory judgment was granted by the court, including the assessment of damages to be specified by the court.
In a dispute with an employee where the employee believes that he or she has not been paid (correctly) for certain overtime hours, it is up to the employer to produce the working time records. If the employer fails to do so, the number of hours claimed by the employee will be considered correct. Therefore, in order to avoid disputes, the recording of working hours – just like the recording of holidays – should be done correctly, especially for employees whose salary is less than three times the minimum wage.
Author: Ilaha Muhseni