The role of the trade union movement under the Pay Transparency Directive: colliding interests?

Point 1

In the context of the transposition and implementation of EU Directive 2023/970 (‘the Directive’) on gender pay gap transparency (‘GPT’), most commentators and the trade press have primarily focused their attention on the responsibilities of employers, i.e. the business community. 

Far less highlighted, but in corporate practice perhaps even more relevant in our view, is the key role that the Directive has entrusted to the ‘workers’ representatives’ (‘WR’, or the trade unions[1]) in the application of the Directive’s rules and principles and the enforcement thereof.

Point 2

In an attempt to schematize their varied responsibilities under the Directive, one could label the WR first of all as the protectors (of GPT rules) in collecting and receiving the proper data, and challenging management on certain practices; secondly, they are supposed to act as partners of management and business on certain specific GPT related issues; and finally, they are the natural first-line enforcers of the GPT rules, litigating on behalf of victims of gender pay gap violations.       

Point 3

First, the WR are the privileged and sometimes exclusive recipient of information and data on gender-based average pay levels[2], the methodology for conducting the mandatory pay gap reporting[3], the gender pay gap by categories of workers[4], and even – if allowed by the member state - identifiable pay-related data of individual workers[5] etc. The latter causes great concern, mainly as regards the protection of personal data under the GDPR rules (see below); more generally, in doing so, the Directive appears to (erroneously) assume that the WR or the trade union movement are some kind of neutral authority, transcending above their basic role as an interest group protecting workers’ interests.   

In the same line, the WR must be consulted with to confirm the correctness of the data on gender pay gap reporting[6].  In addition, the WR are the challengers of info/data submitted by management (on pay and average pay levels and on the mandatory pay gap reporting), and management is required to respond to any such queries within a reasonable time [7].

In their first role in connection with GPT, the WR and the trade unions therefore appear to be protecting the interests of the workers, including assessing, judging and weighing the content and impact of the information and data shared by management. 

The Directive also calls for co-operation/joint efforts and even agreement with WR on certain aspects, ranging from the establishment of categories of workers (for purposes of identifying gender pay gap issues)[8], the establishment of gender-neutral criteria for setting up pay structures[9], over remediation of unjustifiable gender pay differences[10], to conducting the joint pay assessment[11] and implementing appropriate measures to remedy any deficiencies[12].  Generally, the Directive seeks to promote collective bargaining on equal pay issues^[13]. 

This means that, on many key aspects of the Directive, management and the WR (or the trade unions) are supposed to work together as partners in order to secure compliance with the GPT rules.  

On the enforcement side, WR are seen to be the natural supporters to engage in court proceedings over gender pay claims on their own account, or to represent individual workers in such claims[14].  The Directive appears to encourage Member States to introduce ‘class action’ type procedures where WR or trade unions can claim collective redress[15], which would be quite a revolutionary legal development in many Member States[16].  Finally, WR - acting as representatives of alleged victims or as supporters of workers – are to be protected against any form of adverse treatment or retaliation[17].

Point 4

The Directive hands out a lot of responsibilities to workers’ representatives in the highly mediatized and sensitive area of gender-based equal pay, a policy area which is on the limits of EU policy making in the first place[18].  Indeed, bearing in mind the quite considerable financial and reputational liabilities that a company may incur on matters related to equal pay, it is, to say the least, remarkable that the Directive has bestowed such trust on workers’ representatives, the status, legal standing, liability, representativity and reputation of whom varies widely among Member States.   This raises the obvious question of whether it is politically sound and wise to do so. 

Considering this great variety of WR’s traditional roles from one Member State to another, it may well prove difficult, from a practical point of view, to implement these specific diverse roles for the WR to play (as judge/protector, party/partner or enforcer), as it could give rise to contradictory behavior or at least ambiguous approaches and to conflicts of interest.   For instance, in some Member States, the trade union movement does not have a culture or history of cooperating with or joining management in addressing business related HR issues such as equal pay.  Nevertheless, the European Union now calls on them to actively engage with management in constructively handling such delicate issues.     

Moreover, in many Member States, the trade union movement itself is one of the key parties in the process of wage formation, of setting wage scales and actual salary and benefits programs at various levels (national, industry-wide, company-based) through collective bargaining. As a result, the trade union movement bears at least a shared responsibility with businesses, employers’ federations and management, where these pay-related collective agreements still contain elements of gender bias or are deemed to be in violation of the basic rules of the Directive.  In other words, the trade union movement may find itself in a split position, as both accuser and accused regarding potential gender pay gaps in existing collective bargaining agreements. 

Finally, this pivotal role for the WR and trade unions combined with the interconnectivity of the Directive with other regulations may pose problems. Notably, the interference of the Directive with the GDPR is highly problematic.  For instance, the possibility for courts to order the disclosure of confidential information in the context of disputes on gender-related pay claims[19] may obviously run contrary to the basic principles of the GDPR, certainly when sensitive personal data are involved. Also, the possibility left to Member States to allow workers’ representatives to have access to identifiable data in relation to individual workers potential pay equality claims^[20] raises questions for its compatibility with the GDPR.  At the very least, one is faced with a situation of opposing (and conflicting) rights: on the one hand, a worker’s right to assess whether his/her pay is equal to that of an identifiable worker performing the same work or work of equal value, and on the other hand, that individual, identifiable worker’s right to the protection of his/her personal data, especially vis-à-vis a trade union that he/she may not be willing to share this information with for reasons that are entirely the worker’s own and pertain to the individual’s fundamental right of association (or not). 

As the deadline for transposition of the Directive draws closer (7 June 2026), it remains to be seen how each Member State will tackle these issues and ultimately set up a legal framework that is compliant with both the Directive and the Member State’s own traditions and idiosyncratic landscape of social consultation and dialogue.