Parties to collective agreements are not entitled to take primary corrective measures in the case of prohibitions of discrimination based on EU law

Parties to collective agreements do not have the primary option of initially correcting discriminatory collective agreement standards within the scope of prohibitions of discrimination based on EU law. If a collective bargaining standard violates EU law, it is (partially) void and the disadvantaged employee is immediately entitled to be treated in the same way as comparable employees. This follows from a ruling by the German Federal Labor Court on November 13, 2025 (Ref. 6 AZR 131/25).

Facts

The ruling of the Federal Labor Court is based on the following facts: The plaintiff had been employed as a delivery person on a fixed-term contract since June 2019, and subsequently on a permanent contract since June 2020. Due to mutual collective bargaining agreements, in-house collective agreements applied, which provided for remuneration according to pay groups and a group level dependent on the length of employment. In July 19, during a reorganization process, the parties to the collective agreement agreed to extend the level periods for all employees whose employment relationship was newly established after June 30, 2019. The dispute centered on whether this also applied to employees who, like the plaintiff, had already been employed on a fixed-term basis before the cut-off date and were rehired after the cut-off date, and whether in this case the extension of the step periods was in accordance with Section 4 (2) of the German Part-Time and Fixed-Term Employment Act (Gesetz über Teilzeitarbeit und befristete Arbeitsverträge - “TzBfG”).

Reasons for the Decision

The Federal Labor Court upheld the decisions of the lower courts in favor of the plaintiff. The collective agreement provision in dispute also covers employees whose fixed-term employment relationship was re-established after the cut-off date. The extension of the step periods violates the prohibition of discrimination under EU law in Section 4 (2) TzBfG. Due to the reference to EU law, the unequal treatment was subject to full judicial review; the reasons put forward by the employer did not provide a justification. The collective agreement provision discriminated the group of employees who had previously been employed on a fixed-term basis and was therefore partially invalid. As a result, the plaintiff was entitled to the more favorable, shorter step periods. Unlike in cases of violations of the general principle of equality under Article 3(1) of the German Constitution (Grundgesetz - “GG”), the parties to the collective agreement were not entitled to make corrections in advance in this case because the deterrent function of prohibitions of discrimination based on EU law, such as that in Section 4(2) TzBfG, had to be taken into account.

Practical Note

The decision is of considerable importance for employers bound by collective agreements. Discriminatory collective agreement provisions that violate EU law are immediately (partially) void. The parties to collective agreements do not have a primary right to rectify the situation, which can have very significant economic consequences.