Federal Labour Court: Equal pay - Follow-up: Published grounds of judgment

The grounds of judgment, which have been published in the meantime, give an indication of the scope for argumentation left to employers to rebut the presumption of a gender-related pay discrimination.

(No) equal work or work of equal value

The first prerequisite of the equal pay requirement is that two persons of different genders perform the same work or for work of equal value. While the same work requires that an identical or homogeneous activity is performed at different workplaces or successively at the same workplace (Section 4 (1) Wage Transparency Act (EntgTranspG)), work of equal value is to be assumed if employees can be regarded as being in a comparable situation on the basis of a set of factors (Section 4 (2) EntgTranspG). This set of factors includes the type of work, training requirements and working conditions.

In the case decided, the BAG found that both persons performed the same work. They were both employed in field sales and had the same responsibilities and powers. In addition, the persons had represented each other without the need for separate instruction. The arguments put forward by the employer against a homogeneity did not convince the BAG. The BAG did not consider different customer and product responsibilities of the persons to be significant because the employer had not explained what effects these responsibilities would have had on the sales activities and requirements. The BAG also did not consider the different training of the two persons to be contrary to homogeneity because no specific vocational training was required for the field sales activities.

(Rebut the) presumption of unequal pay treatment "on the basis of gender”

Even if the activity is the same or of equal value, the BAG ruling still leaves room for an argument against the presumption of unequal pay treatment on the basis of gender. However, the employer, who has the burden of proof in this respect, cannot defend itself against the presumption with general assertions, but only with concrete reasons for differentiation.

The BAG sees a potential argument for a permissible differentiation in remuneration in the fact that the agreement on a higher salary with the comparable person was necessary due to the situation on the labour market to fill a vacant position with a suitable employee.

In addition, the BAG accepts better qualifications of the better paid person as a criterion for differentiation. With reference to the ECJ case law, the BAG also explicitly mentions the relevant professional experience at the time of hiring in addition to the specific training. Higher professional experience generally enables employees to perform their work better. In the case decided, the employer did not succeed with its assertion of a different qualification because it initially left this circumstance out of the court proceedings but raised it only in the appeal before the BAG.

Conclusion

Even after studying the grounds of judgment, the assessment that the judgment entails severe restrictions on the employer's contractual freedom with regard to persons performing equal work or work of equal value remains. Employers should therefore continue to pay particular attention to negotiating the compensation of employees who may be performing equal work or work of equal value.

Employers should document objective circumstances indicating that the work is not at least of equal value before entering into a contract. If individuals are in fact performing at least work of equal value and are nonetheless being compensated differently, objective reasons for differentiation should also be adequately documented in a timely manner. Employers are well advised to record any objectively worsened recruitment opportunities which are not only due to better negotiating skills of the better-paid person. The same applies to objective differences in qualifications.