Search
Contact
06.03.2023 | KPMG Law Insights

Ruling on equal pay – the end of salary negotiations?

Ruling on equal pay – the end of salary negotiations?

If an employer pays a woman a lower salary than a comparable male colleague, he cannot claim that the man negotiated better. This was decided by the Federal Labor Court (Bundesarbeitsgericht – BAG) on February 16, 2023 (Ref.: 8 AZR 450/21).

A female sales employee had filed a lawsuit because she received a lower base salary than her two male colleagues despite doing the same work. In her lawsuit, she demanded payment of wages in the same amount as her colleague who was hired almost at the same time. The employer argued that the male colleague had negotiated better and had also succeeded a female employee with higher earnings.

The lower courts had dismissed the employee’s claim. The BAG, on the other hand, ordered the employer to pay a total of 14,000 euros in back pay and compensation of 2,000 euros.

Negotiating skills do not justify unequal treatment

The BAG ruled that the plaintiff had been discriminated against on the basis of her gender, as she received a lower basic salary than her male colleagues despite doing the same work.

Pursuant to Section 22 AGG, it is presumed that discrimination has occurred on the basis of gender. The employer would have had to disprove this. In the opinion of the BAG, however, he did not succeed in doing so. The argument that the male colleague had negotiated better was not sufficient for the BAG. Even the assertion that the colleague had succeeded a better-paid employee who had left the company could not rebut the presumption of discrimination.

 

Significantly less leeway remains for pay above the collective wage agreement

The ruling has far-reaching consequences for employers who do not apply fixed remuneration systems or pay salaries or allowances above the general pay scale. The scope for freely negotiated salaries is likely to become significantly smaller with the current decision. Even though the reasons for the ruling are not yet available, it can be assumed: If the employer pays employees of one gender higher salaries than those of the other gender for the same job, it will only be able to rebut the presumption of discrimination in a very limited number of cases.

 

How should employers act now?

With regard to threatened compensation due to discrimination, companies should analyze their salary structure for possible unequal treatment and document factual reasons for the identified salary discrepancies.

In order to avoid possible legal disputes in the future, it can be advantageous for employers if uniform and transparent compensation systems apply to all employees. The reasons for the court’s ruling may provide further approaches for the design of compensation systems, which should be taken into account by employers after publication. These remain to be seen.

 

 

Explore #more

01.12.2023 | PR publications

WiWo: Best of Legal Awards – Philipp Glock Leader of the Year

On Thursday evening, WirtschaftsWoche honored outstanding projects and minds from consulting firms and law firms in Düsseldorf and celebrated the second Best of Professional Night…

29.11.2023 | KPMG Law Insights

Energy transition also opens up business opportunities

The energy industry’s complex, capital-intensive transformation process offers investors and banks a great deal of potential By Lars Christian Mahler and Marc Goldberg for Börsen-Zeitung,…

29.11.2023 | KPMG Law Insights

Guest article in ZURe – AI and the legal department of tomorrow

The current issue of ZURe (p. 48 ff.) contains a guest article by KPMG Partner Sina Steidel-Küster (Regional Director Southwest, Head of Stuttgart office) and…

29.11.2023 | KPMG Law Insights, KPMG Law Insights

Key Facts about the new draft of the “Data Act

On February 23, 2022, the EU Commission presented the new draft of the so-called Data Act, the “Regulation on harmonized rules for fair access to…

21.11.2023 |

Guest article in ZURe on the implementation of CSRD reporting in SMEs

The current issue of ZURe (p. 34 ff.) contains a guest article by Lena Plato (Director Legal & Compliance, FLABEG Automotive Group GmbH), KPMG Law…

20.11.2023 | Press releases

Statement by KPMG Law experts in Handelsblatt on the topic of sustainability cooperation in antitrust law

In the Handelsblatt, KPMG Law expert Jonas Brueckner is quoted in detail on the subject of cooperation in terms of sustainability. Until this summer, there…

15.11.2023 |

Legal 500 – Country Comparative Guide Germany

Gerrit Rixen and Jonas Brueckner provide an overview of the relevant legal regulations in the area of Competition & Litigation in a practical guide on…

14.11.2023 | Press releases

Tax and Law at a glance – New issue of the digital magazine “Talk

“Talk” stands for Tax and Law Compass, because that’s what the digital magazine wants to be: a navigation aid to the legal and tax aspects…

13.11.2023 |

Statement from KPMG Law experts in Brand eins magazine on the use of AI

The business magazine brand eins asked eight experts about the use of AI in the legal sector. “Many business people cannot even begin to estimate…

10.11.2023 | Deal Notifications

KPMG Law and KPMG AG Wirtschaftsprüfungsgesellschaft advise Ziemann Holvrieka on the acquisition of Künzel Maschinenbau

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised Ziemann Holvrieka GmbH from Ludwigsburg on the acquisition of the majority of shares…

Contact

Kathrin Brügger

Partner

Friedenstraße 10
81671 München

tel:
kbruegger@kpmg-law.com

André Kock

Manager

Fuhlentwiete 5
20355 Hamburg

tel: +49 (0)40 360994-5035
andrekock@kpmg-law.com

© 2023 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll