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Negotiating skills do not justify higher salary for men

A female employee is entitled to equal pay for equal work even if the employer justifies the higher salary of a male colleague on the grounds that he negotiated his salary better. This was decided by the Eighth Senate of the Federal Labor Court in a ruling dated February 16, 2023 (Case No. 8 AZR 450/21).


The plaintiff had been employed by the defendant as a sales representative since 2017. Her base pay was initially 3,500 Euros (gross) and has been increased to 3,620 Euros (gross) subsequently. Shortly before the plaintiff, the defendant had hired a male colleague in the same position. The defendant had also initially offered the colleague a basic salary of 3,500 Euros (gross), which the colleague rejected and demanded a higher salary. The defendant gave in to this demand and paid the colleague a salary of 4,120 Euros (gross).

In justification of this, the defendant referred, among other things, to the fact that the colleague had succeeded a sales employee who had left the company and was better paid. In addition, it pointed out that the colleague would not have been willing to enter into an employment relationship with the defendant if he had been paid less.

The plaintiff is seeking payment of the difference between her compensation and the compensation of the better-paid colleague. Due to the discrimination on the grounds of her gender, she also demands payment of appropriate compensation of at least 6,000 Euros. She is of the opinion that the defendant must pay her a basic salary that is just as high as that of her male colleague who was hired at almost the same time. This follows from the fact that she performs the same work as her male colleague.

The lower courts had dismissed the claim in each case. The plaintiff's appeal to the Eighth Senate of the Federal Labor Court was now largely successful. The court only granted the claim for compensation in the amount of 2,000 Euros.

Reasons for decision

According to the Federal Labor Court, the defendant discriminated against the plaintiff on the basis of her gender by paying her a lower basic wage although she and her male colleague performed the same work. The plaintiff was therefore entitled to the same basic pay as her male colleague. This resulted from Art. 157 TFEU, Sec. 3 (1) and Section 7 of the Pay Transparency Act (EntgTranspG).

The fact that the plaintiff received a lower basic salary than her male colleague for the same work justifies the presumption under Section 22 of the General Equal Treatment Act (AGG). The provision states that if, in the case of a dispute, one party proves circumstantial evidence suggesting discrimination on the grounds of one of the grounds of discrimination listed in Section 1 AGG - including gender - the other party bears the burden of proving that there was no violation of the provisions protecting against discrimination.

The defendant did not succeed in rebutting the presumption of Section 22 AGG. In particular, the defendant could not successfully plead that the higher basic pay of the male colleague was not based on gender, but on the fact that the male colleague had negotiated a higher pay. Moreover, the defendant could not rebut the presumption of pay discrimination on the basis of gender on the grounds that the employee had succeeded a better-paid female employee who had left the company.

Notes for practice

With its decision, the BAG steals the thunder from a frequent justification for the unequal pay of men and women. In the future, it will no longer be possible to refute presumed discrimination on the basis of gender by arguing that the male colleague was more brisk in salary negotiations.

The court thus comprehensibly restricts the private autonomy of the parties to the employment contract in favor of greater pay equity. This is because the reference to salary negotiations is in principle suitable to explain any pay gap. If this suffices as justification, the equal pay requirement of Section 7 EntgTranspG would be deprived of some of its effectiveness.

The differential wage and compensation claim sued for in the present case exists irrespective of the size of the company, so that even smaller companies are exposed to a liability risk. In the future, employers should examine even more closely whether different pay for employees can be justified by objective criteria such as qualifications or professional experience. In case of doubt, these criteria should be carefully documented so that they are later armed against accusations of discrimination.

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