Federal Labor Court, Judgment of Jan. 16, 2023, 8 AZR 450/21, Press Release No. 10 of Feb. 16, 2023
Background
The plaintiff sought payment from the defendant of a salary equal to that of a male colleague. The plaintiff had been employed by the defendant in the sales department as a field sales employee since March 2017 at a salary of initially €3,500 gross, which was agreed individually. From August 2018, her payment was then based on an in-house collective agreement, on the basis of which she received €3,620 gross per month.
In addition to the plaintiff, two other male employees worked in the field, one of whom had been hired almost at the same time as the defendant. This employee was also initially offered a salary of €3,500 gross, although he rejected this sum and demanded a higher amount.
The defendant gave in to this demand and paid the male employee a wage of €4,500 gross during his induction period, after which his wage was temporarily lowered to the plaintiff’s wage level, but then raised to €4,120 gross under the new collective bargaining agreement as of August 2018. In support of this, the defendant argued that the male employee had taken over the job of a better-paid former female employee.
The plaintiff demanded payment of the arrears in the amount of the difference to the salary of her male colleague from the defendant. Since the latter performed the same work as she did, the defendant would be obliged to pay the same remuneration. This unequal treatment of the two employees had occurred on the basis of gender, so the plaintiff continued to demand compensation payments from the defendant in the amount of at least €6,000.
The Labor Court and the Saxony Regional Labor Court dismissed the action. The plaintiff’s appeal to the Federal Labor Court was largely successful.
Reasons
The Federal Labor Court affirmed discrimination on the basis of the plaintiff’s gender, as she was paid a lower salary despite performing the same job. Therefore, the plaintiff is entitled to payment of the difference in the amount of €14,500.
This is derived from Article 157 of the Treaty on the Functioning of the European Union, according to which the principle of equal pay for men and women for equal work or work of equal value is to be ensured, as well as from Section 3 and Section 7 of the German Pay Transparency Act, which also stipulate the prohibition of paying an employee lower pay on the basis of gender.
The plaintiff has sufficiently demonstrated that she was disadvantaged by the lower wage payments compared to her male colleague, so that the presumption provision of § 22 General Equal Treatment Act applies, according to which the defendant bore the burden of proof that there was no violation of the equal treatment provisions. However, the defendant did not succeed in exonerating itself from this allegation.
In particular, the defendant’s argument that the higher pay of the male colleague is based on his better negotiating skills is not valid. Nor can the defendant rely on the fact that the male employee succeeded a better-paid female employee who had left the company.
The Federal Labor Court also partially upheld the plaintiff’s claim for compensation and considered a payment of €2,000 to be appropriate.
Evaluation
This landmark judgment of the Federal Labor Court greatly strengthens the equal pay principle, as the negotiating skills of a male employee cannot justify lower pay for a female colleague. Different pay for the same job can only be justified, for example, by qualifications, professional experience, length of service with the employer or other gender-neutral, objective reasons.
According to the Federal Statistical Office in Germany, the gender pay gap in Germany is still 18 percent, often due to differences in qualifications, working hours and employment biographies. Nevertheless, regardless of these causes, a salary gap of 7 percent on average remains between male and female employees.
This situation could improve in the future as a result of the ruling by the Federal Labor Court.
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