Deviations from the equal pay principle are possible

Plaintiff received up to four euros less

The plaintiff was employed by the defendant as a temporary employee from January to April 2017 and received EUR 9.23 per hour. Comparable permanent employees, on the other hand, received remuneration of EUR 13.64 per hour. The plaintiff initially unsuccessfully claimed the difference in pay before the Labour Court Würzburg and the Higher Labour Court. In her opinion, the applicable collective agreement concluded between the trade union ver.di and employers’ association iGZ was not compatible with Article 5 Para. 3 of Directive 2008/104/EC. The Federal Labour Court (“BAG”), which was entrusted with the legal dispute in the context of the appeal, then suspended the proceedings and submitted the case to the ECJ in a preliminary ruling procedure in order to ensure an interpretation of Sec. 8 Para. 2 Sentence 2 AÜG in conjunction with Sec. 10 Para. 4 Sentence 1 AÜG within the meaning of Article 5 Para. 3 of Directive 2008/104/EC.

In principle, the above mentioned directive obliges temporary work agencies to pay temporary workers the same as comparable permanent employees of the hirer in accordance with the so-called equal pay principle. However, it is possible to deviate from this by means of a collective agreement. The German legislator implemented this in Sec. 8 of the AÜG.

ECJ: Compensation for disadvantages necessary

The ECJ came to the conclusion (ECJ, 15 December 2022, C 311/21) that it is possible to deviate from the equal pay principle by a collective agreement pursuant to Art. 5 Para. 3 of Directive 2008/104/EC, as long as the unequal treatment is compensated for by a corresponding provision. According to the ECJ, the compensation must relate to the essential working and employment conditions. These are the duration of working hours, overtime, breaks, rest periods, night work, vacation, days off and remuneration. It should be noted that the advantages granted in the collective agreement must neutralise the disadvantages in order to ensure the overall protection of temporary workers required by the Directive. According to the ECJ, it is up to the parties of the collective agreement to decide which advantages are suitable to compensate for given disadvantages, and their decisions must stand up to judicial review. However, the decisive factor remains an examination of the individual case in question, based on which advantages and disadvantages for the respective temporary worker are to be added up against each other.

Continued payment of wages during non-lending period compensates for wage difference

The BAG implemented this case law in its ruling of the 31 May 2023 and declared a reduction in wages pursuant to Sec. 8 Para. 2 Sentence 2 AÜG in conjunction with Sec. 10 Para. 4 Sentence 1 AÜG old version as permissible. On the one hand, the applicable collective agreement provided that temporary workers also receive pay during a period of non-assignment. This ensured that temporary workers were entitled to a regular income even if they were not hired and therefore did not perform any work.

On the other hand, the BAG emphasised that when considering collective bargaining agreements, benefits or protection granted by legislation must also be included in the weighing. In this regard, the court stated that according to Sec. 11 Para. 4 Sentence 2 AÜG, the hiring company always bears the economic and operational risk. A waiver of Sec. 615 Sentence 1 civil code by the lender is therefore not possible, so that temporary workers must also be paid wages if the employer is in default with the acceptance of the services.

In addition, the BAG pointed to compliance with the national minimum wage principles, which are an integral part of the protection of employees. Consequently, deviations of more than EUR 4 may also be permissible as long as they preserve the current minimum wage limit. At that time, the minimum wage was set at EUR 8.84.

Overall, in the opinion of the BAG, the benefits granted by the applicable collective agreement and by law were sufficient to compensate for the reduction in wages.

Conclusion

Employers can breathe a sigh of relief for the time being: There will be no renegotiations of existing collective agreements or back payments due to a violation of the equal pay principle for the time being.

The following applies for the future: It must be determined by means of a case-by-case decision whether temporary workers are granted an advantage that compensates for any disadvantage compared to permanent employees. It remains open under which circumstances an advantage granted is not sufficient to compensate for a disadvantage. The ECJ merely stated that a significant disadvantage must also be compensated by a significant advantage. The ECJ did not specify any criteria for the assessment, so that these are left to the discretion of the parties to the collective bargaining agreement. The BAG's statement of reasons for the judgment, which has not yet been published, may provide more information on this.