In its decision of 16 February 2023 – 8 AZR 450/21 – the Federal Labour Court (Bundesarbeitsgericht, BAG) ruled that a woman is entitled to the same remuneration as her male colleagues if the employer pays the male colleagues higher remuneration for the same or equivalent work on the basis of gender. This does not change if the male colleague demands higher pay and the employer complies with this demand. The so-called “better negotiating skills” are therefore not a suitable objective criterion to justify unequal treatment.
The plaintiff has been employed by the defendant as a sales representative since 01.03.2017. Her monthly basic remuneration was initially EUR 3,500.00 gross. From 01.08.2018, her remuneration was based on a company collective agreement. The pay group of the company collective agreement that was relevant for the plaintiff provided for a basic pay of EUR 4,140.00 gross. Pursuant to section 18(4) of the in-house collective agreement, if the new collectively agreed basic remuneration exceeds the previous collectively agreed remuneration, an adjustment of no more than EUR 120.00 gross shall be made. As of 1 August 2018, the defendant paid the plaintiff a basic wage of EUR 3,620.00 gross, which was to be further increased in annual steps.
In addition to the plaintiff, two male employees were employed as sales representatives of the defendant. One of them had been employed since 01.01.2017, i.e. only two months before the beginning of the employment relationship of the parties. The defendant had also offered the male employee a basic salary of EUR 3,500.00 gross, which he, however, rejected. Instead, he demanded a higher basic salary of EUR 4,500.00 gross (for the period until the introduction of an additional performance-related remuneration) until 31 October 2017. The defendant complied with this demand. In the period from November 2017 to June 2018, the defendant paid the employee, as well as the plaintiff, a basic remuneration of EUR 3,500.00 gross. Subsequently, the defendant agreed with the employee to increase the basic pay to EUR 4,000.00 gross as of 01.07.2018. Finally, the defendant paid the employee a basic wage under the collective agreement according to the same pay group as the plaintiff, which amounted to EUR 4,120.00 gross in application of section 18 (4) of the company collective agreement.
Lower courts dismiss action
The Dresden Labour Court(judgment of 04.10.2019, ref. 5 Ca 638/19) as well as the Saxony Regional Labour Court(judgment of 03.09.2021, ref. 1 Sa 358/19) rejected a violation of the equal pay requirement under section 7 of the Remuneration Transparency Act (EntgTranspG). There was no unequal treatment on the grounds of gender in this case. It had been an objective interest of the employer to hire the better negotiating male employee with the aim of attracting employees for a higher remuneration.
Appeal before the BAG successful
The BAG did not follow the previous instances. The plaintiff has a claim under Art. 157 TFEU, Sec. 3 (1 ) and Sec. 7 EntgTranspG to the same basic pay as her male colleague. The unequal treatment cannot be justified by the male employee’s “better negotiating skills”. As a result, the BAG awarded the plaintiff back pay in the amount of the difference between her remuneration and the remuneration of her male colleague, as well as additional compensation in the amount of EUR 2,000.00 pursuant to section 15, paragraph 2 of the General Equal Treatment Act (AGG).
Presumption under § 22 AGG – discrimination on grounds of sex
The defendant discriminated against the plaintiff in the period from March to October 2017 and in July 2018 on the basis of her gender by paying her a lower basic salary than the male colleague, although the plaintiff and the male colleague performed the same work.
Inprinciple, the plaintiff has to show and prove that the defendant pays her a lower wage than the male colleague for the same work or work of equal value and that this disadvantage is only due to the difference in gender. However, if the plaintiff proves circumstantial evidence suggesting discrimination on grounds of gender, the defendant bears the burden of proving that there was no violation of the provisions on protection against discrimination, cf. section 22 AGG. However, the fact that the plaintiff received a lower basic salary than her male colleague for the same work justifies the presumption of discrimination on grounds of gender within the meaning of section 22 AGG(cf. already BAG, judgement of 21 January 2021, ref. 8 AZR 488/19). Therefore, the defendant has to present and, if necessary, prove that there has been no violation of the equal pay principle, but that exclusively other reasons than gender have led to less favourable treatment.
The defendant did not succeed in rebutting this presumption. In particular, the defendant cannot successfully plead that the higher basic pay of the male colleague was due to the fact that the male colleague had negotiated a higher pay. Furthermore, the defendant cannot rebut the presumption of a disadvantage in pay due to gender on the grounds that the male colleague succeeded a female employee who had left the company and was better paid.
Justification of unequal treatment: Objective reasons remain admissible
However, the different remuneration of employees of different sexes for the same or equivalent work remains permissible if the unequal treatment is justified on objective grounds. Such reasons may be, in particular, professional experience or qualifications.