Equal Pay for Women – This Judgment is a “Milestone”

With a fundamental judgment on equal pay, the Federal Labor Court (BAG) has strengthened the right of women to equal pay. If the employer gives in to higher wage demands from a man, he must pay the same wage to an equally qualified colleague, as the BAG decided on Thursday in Erfurt. (Az: 8 AZR 450/21)

In the case at hand, a metal company in Saxony had offered a basic salary of 3,500 euros for new hires in sales. The plaintiff accepted. A male colleague who had been hired three months earlier had asked for more money and negotiated a basic salary of 4,500 euros. As part of a new collective bargaining agreement, both temporarily received 3,500 euros, but the man then received 4,000 euros again.

With her lawsuit, the woman demanded compensation for discrimination and retrospectively also higher wages. She did the same work and should therefore be paid the same as her male colleague. The employer justified the unequal treatment with the man's better negotiating skills. After defeats in the lower courts, the BAG now largely agreed with the woman.

The employer paid her a lower base salary than a male colleague, even though both do the same job. According to the law, in such cases there is a presumption that discrimination was based on gender.

The metal company had not succeeded in refuting this assumption. In particular, the employer cannot claim that the man's better pay is not based on his gender but on his negotiating skills. The BAG also did not accept the argument that his position had previously been occupied by a colleague who was also better paid. It awarded the woman 14,500 euros in lost wages and discrimination compensation of 2,000 euros.

The Society for Freedom Rights, which had supported the plaintiff, spoke in Berlin of a "bang" for equal pay. The Federal Anti-Discrimination Commissioner, Ferda Ataman, praised the Erfurt verdict as a "milestone for fair wages in Germany".

The German Trade Union Confederation (DGB) also welcomed the decision. "So that every woman does not have to sue for this claim in court individually, we need the obligation for companies to regularly check their remuneration practices and eliminate discrimination," demanded Elke Hannack, deputy chairwoman of the DGB.

Employment lawyers assume that the judgment will have a signal effect. "The Federal Labor Court gives teeth to the requirement of equal pay," said Gregor Thüsing, Director of the Institute for Labor Law and Social Security Law at the University of Bonn. Now it comes to the justification of a salary range.

Michael Fuhlrott, employment lawyer and professor at the Fresenius University of Applied Sciences in Hamburg, also expects far-reaching consequences. The court's decision is "a milestone" in the issue of equal pay for women and men and will be of great importance for the world of work. "After the current decision, questions of wage equity are likely to arise more frequently and lead to labor court proceedings," he said.

In addition, it can be assumed that claims for information under the Pay Transparency Act will be asserted more frequently in the future. "If this results in gender-related wage unequal treatment, the lower-paid employee can sue for the difference in salary and immaterial damages." The employer must then explain that there are objective reasons that justify a different payment.

For final clarity, the justification for the decision must still be awaited. "It will be decisive how the court adjusts the adjustment screws to the procedural burden of proof and explanation in its judgment." With AFP

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