Right to overtime remuneration for management staff

It often happens that the employer unjustifiably refuses to pay the employee remuneration for overtime work, claiming that the employee is employed in a managerial position and, in accordance with the Labor Code, he is not entitled to additional remuneration.

The basis for such action by the employer is art. 1514§1 of the Labor Code:

Managing employees on behalf of the employer, the workplace and managers of separate organizational units perform, in case of need, work outside normal working hours without the right to remuneration and an allowance for overtime work, subject to § 2”.

The aforementioned provision protects employers, but this protection results from the fact that an employee in a managerial position usually has a higher salary than a regular regular employee, therefore he must take into account that he will sometimes have to stay longer at work and therefore will not receive additional remuneration. . However, the protection of the employer’s interests in this matter is not absolute and there are exceptions to it. In order to determine whether the employer may refuse the right to overtime pay, three important questions should be answered:

  • Is the given employee an employee managing the company on behalf of the employer or the manager of an organizational unit?
  • How often does overtime work and what is it caused by, i.e. is it necessary to do such work?
  • Who recommends the employee to work overtime?

 

I. Definition of a managing employee and a head of a separate department

A definition of a managing employee can be found in Article 128 §2 point 2 of the Labor Code, according to which, if it is referred to:

 “Employees managing the workplace on behalf of the employer – this should be understood as employees who manage the workplace individually and their deputies or employees who are members of the collective body managing the workplace and chief accountants”.

Members of the company’s management board most often fit this definition.

The situation is a bit more complicated when it comes to determining who the manager of a separate organizational unit is. There is no answer to this question in the provisions of the Labor Code, court judgments can help. It is assumed that an employee at the head of a separate organizational unit is a person whose tasks include managing a team of employees, including in particular organizing and supervising the work of other employees, determining their working time, granting them dismissals, and making decisions on hiring new employees. On the other hand, if an employee at the head of a given organizational unit actually performs work on an equal basis with other team members, he will not be treated as an employee in a managerial position (see the justification of the judgment of the Court of Appeal in Katowice of April 21, 2016, file reference number III APa 3/16).

II. The need to work overtime

The key is to determine whether or not the remuneration for overtime work is included in Art. 1514§1 of the Labor Code wording „in case of emergency”.

If the overtime work is permanent, i.e. it is repeated regularly every week or month, for several or several dozen hours a month, an employee holding managerial positions in the department will have the right to remuneration. It is assumed that persons employed in managerial positions may not be deprived of the right to remuneration and a supplement for overtime work, if, due to defective work organization independent of them, they are forced to systematically exceed the applicable working time standards (see the justification of the judgment Court of Appeal in Gdańsk dated 13 September 2017, file ref.no.III APa 11/17). This was very well explained by the Provincial Administrative Court in Warsaw (see the judgment of 25 July 2017, V SA / Wa 2229/16), stating that the necessity to work overtime without remuneration must be sporadic, justified by an exceptional situation, and not as permanent performance of work in excess of the working time applicable to the employee, resulting from a defectively defined scope of activities or improper organization of work.


III. Overtime work order

When assessing whether, in a given case, the managing employee is entitled to remuneration for overtime work, it is still necessary to answer a very important question: Did the employer instruct the employee to stay at work longer or was it his own initiative and resulted from the fact that he wanted to take care of everything in the company ? If it turns out that it is the employee who has decided on his own that he wants to stay at work longer, he will not be entitled to remuneration for overtime work. If the employer has decided and instructed the employee to stay longer at work, overtime work should be paid if the above-mentioned conditions are met.

In summary, employment in a managerial position does not mean that such an employee will never be entitled to overtime, and employers seem to forget about it. Additionally, the regulations are often abused by employers. Many times, employers unjustifiably assume that a given employee is an employee employed in a managerial position only because he is relatively high in the structure of the company, and his position has been referred to as the managerial position. Meanwhile, the refusal to award remuneration for overtime work requires an analysis of whether the position, despite its name, is actually a managerial position.