On 21 January 2021, the Federal Labour Court rendered a judgement (File no.: 8 AZR 488/19) that makes it easier for female employees to assert a claim to equal pay with their male colleagues.
Under the German Pay Transparency Act (EntgTranspG), which came into effect in mid-2017, discrimination in pay on the grounds of gender is prohibited. The Act grants employees an individual right to information, according to which the employer must disclose the median pay of comparable employees of the other gender.
In the case underlying the Federal Labour Court’s decision, the employer had informed a female department head in response to her request for information that the male department heads received a higher median basic salary as well as higher allowances. The female department head then demanded payment of the difference in pay.
The court of appeal had dismissed the action, stating that the information provided according to the Pay Transparency Act did not provide any indication of discrimination on grounds of gender. The Federal Labour Court took a different view. In the opinion of the Federal Labour Court, the fact that a woman’s pay is lower than the median pay of comparable male employees – as disclosed by the employer in accordance with the Pay Transparency Act –indicates that the discrimination in pay was due to her. It is up to the employer to rebut this presumption, i.e., to demonstrate and prove that the female employee is paid less for reasons other than her gender.
The Pay Transparency Act, which has often been criticized as a „paper tiger“, thus gains considerable importance.
