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In a recent ruling by the Federal Labour Court (BAG) dated February 16, 2023, a significant signal was sent against equal pay between women and men. The decision underlines that discrimination based on gender cannot be justified by individual salary negotiations alone.
The case
A sales representative, who worked for a company with a gross monthly salary of 3,500 EUR, sued her employer due to a salary difference compared to a male colleague in a comparable position. Despite dismissed lawsuits in previous instances, the plaintiff's appeal to the BAG was successful. The court found that the plaintiff was disadvantaged because she was paid a lower base salary than her male colleague for comparable work.
The decision
The BAG emphasized that the presumption of gender-based pay discrimination under Section 22 AGG cannot be refuted solely by the alleged negotiation skills of the male colleague with regard to the agreed higher salary. This decision underlines the importance of equal pay and clarifies that employers cannot simply claim that a higher salary was agreed as a result of better negotiation skills.
Implications for practice
This decision will have a significant impact on employment law practice and HR departments. It underlines the need for employers to precisely document legitimate interests in differentiated remuneration. They should also avoid individual and non-performance-based agreements to ensure that there is no pay discrimination.
Although the decision is generally welcome, there is also criticism. Some of the BAG's arguments, in particular with regard to negotiation skills, are considered unconvincing. Nevertheless, HR departments are now more than ever required to define and document factual criteria for remuneration. It is expected that performance-related forms of remuneration and objective, uniform compensation regulations will become more important in order to resolve uncertainties regarding equal pay.
conclusion
The Federal Labour Court's ruling of February 16, 2023 is an important step towards equal pay between women and men. It sends a clear signal to employers that equal pay is not tolerated and that justifying salary disparities through individual negotiations is not sufficient to justify discrimination. The decision underlines the importance of transparency and documentation when setting salaries and requires employers to set clear and objective criteria for compensation.
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