Development of Anti-Discrimination and Anti-Sexual Harassment Law in Germany and in the EU
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1 Development of Anti-Discrimination and Anti-Sexual Harassment Law in Germany and in the EU Dr. Gerlind Wisskirchen Christopher Jordan Norton Rose Vieregge Theodor-Heuss-Ring Cologne, Germany Tel: Fax: gerlind. wisskirchen@nortonrose.com christopher.jordan@nortonrose.com 1
2 INTRODUCTION Protection against discrimination and sexual harassment at the workplace, which, although of less importance in Germany than in other countries, has, particularly under the influence of European law, constantly continued to develop. The basis for the activity of the EU is Article 13 of the European Community Treaty, which provides:... the Council,... on a proposal from the Commission after consulting the European Parliament,... may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. 1 Now, Germany is facing significant changes in terms of anti-discrimination and sexual harassment law. Three EU directives will force German legislators to substantially change national law. 1 CURRENT LEGAL SITUATION IN GERMANY Up to now, the principle of freedom of contract and free discretionary power of selection of employees by the employer apply under German law. Provisions regulating discrimination can generally be found in German Law, but do not apply in the contractual relationship between employer and employee, except those regarding gender discrimination. 1.1 DISCRIMINATION BASED ON GENDER An express prohibition of unfair labor discrimination can be found in the German Civil Code. 2 According to the German Civil Code 3, the employer is not permitted to discriminate against an employee in an agreement or an action because of his/her sex. If the employer acts contrary to this prohibition, an employee may claim damages from the employer. Although this applies equally to male and female employees, the latter have so far been far more successful in claiming damages. The employer may, however, make a differentiation due to gender if it is essential for the activity in question that the employee belongs to a certain gender. 4 This applies for example to cases concerning the protection of the private rights of patients or persons requiring care or in the area of theatre, e.g., the casting of roles in plays or ballet. 1 ABl. EG No C 340 of November 10, 1997, p.1. 2 Bürgerliches Gesetzbuch (BGB). 3 Section 611a BGB. 4 Section 611a (1) sentence 2 BGB. 2
3 The greatest progress towards equal treatment of employees under German law has been made due to decisions of the European Court of Justice, which for more than a decade has often been appealed to by German courts in matters of equal treatment. The standard prohibition of sex discrimination, which is normally the source of the Courts binding judgments, is provided for in Article 141 of the EC Treaty. 5 This Article refers only to the principle of equal pay for equal work. 6 A broader interpretation of this article, extending its applicabilityto other areas of unequal treatment than payment-related discrimination, was expressly rejected by the European Court of Justice. 7 A general definition of discrimination cannot be found in the provisions of German law. However, the courts have interpreted the term as including direct discrimination as well as indirect discrimination. (a) Direct Discrimination In cases of direct discrimination unequal treatment is directly based on the gender of the victim. This applies when, for example, women receive lower wages than men although they are doing the same work, or when a job offer is addressed to one sex only. Direct discrimination includes discrimination on the grounds of characteristics which can only apply to a certain sex, e.g., pregnancy. 8 For example, the employer asking in a job interview whether a female job applicant is pregnant would normally constitute a case of prohibited discrimination. 9 (b) Indirect Discrimination In the case of indirect discrimination on the other hand, the unequal treatment is caused by an objective, apparently neutral rule or provision, which applies to both sexes, but which, in fact, affects one group more than the other. The first revolutionary decision of the European Court of Justice as regards indirect discrimination was taken in 1981 in the Jenkins-case. 10 The European Court of Justice held that paying part-time employees a lower hourly wage than full-time employees constituted sex-based discrimination by means of the wage policy of an employer. In view of the fact that considerably fewer female than male employees had 5 Vertrag zur Gründung der Europäischen Gemeinschaft (EGV). 6 Cf Section 612(3) BGB. 7 European Court of Justice, June 15, 1978, "Defrenne III", Slg. 1978, European Court of Justice, November 8, 1990 AP EEC Treaty Article 119 No European Court of Justice, November 8, 1990, AP No. 23 to Article 119 EEC Treaty Dekker; German Federal Labor Court (BAG), October 15, 1992, NZA 1993, 257, European Court of Justice, March 31, 1986, Slg. 1981, p. 911 = AP EEC Treaty Art. 119 No. 2 = NJW 1981,
4 full-time employment female employees were seldom entitled to the higher hourly wage, and the employer s wage policy amounted to unequal payment. Thus, if there is an actual discrimination of a group of employees, it is no longer relevant whether the discrimination was practiced intentionally or even only knowingly. Exceptions to the prohibition of indirect discrimination can be made if they are justified by objective reasons. The European Court of Justice 11 indicated three elements whose (cumulative) presence can indicate an objective justification: Objective reasons for the differential treatment by the employer, necessity for the attainment of the employer s goals and proportionality of goals and discrimination. 1.2 DISCRIMINATION BASED ON AGE No general prohibition against age discrimination has yet been implemented into the German legal system. Labor laws and collective bargaining agreements often provide for the different treatment of older persons in comparison with younger employees. Some of these provisions are considered favorable for the older employee, others unfavorable. (a) Favorable Treatment The Act on Protection Against Unfair Dismissal 12 defines age as a criterion for the selection of employees to be dismissed in business-related redundancies. Furthermore, collective bargaining agreements, especially in the public sector, often provide higher and sometimes guaranteed salaries according to age. In addition, older employees are entitled to more paid vacation and to fewer working hours, and they are especially protected against dismissal. In addition, social plans and collective bargaining agreements often provide for higher severance payments for elderly employees and so does the Act on Protection Against Unfair Dismissal. 13 Partial retirement agreements provide for a gradual retirement for older employees. (b) Unfavorable Treatment 11 European Court of Justice, May 13, 1986, Slg. 1986, p
5 However, higher age is not always considered positive for the employee. Under German law, employment agreements do not terminate automatically when the employee reaches a certain age. Nevertheless, many labor or collective bargaining agreements include general age limits, such as the termination of employment at the age of 65. This limitation is approved by the Federal Labor Court. The retirement age for certain professions can be higher (e.g., midwifes) or lower (e.g., pilots) than 65. Age limits for hiring personnel can be accepted as an expression of the freedom of contract. It is currently admissible under German law for an employer to ask the age of an applicant and to reject job applicants on the basis of age, as well as to advertise for applicants specifying a certain age group. The Act on Part Time-and Fixed-Term Employment Contracts, 14 which became effective on January 1, 2001, provides that limited-term agreements may be concluded with employees who have completed their 52 nd year without giving factual reasons. 15 As of January 1, 2007, this act will apply to employees upon completion of their 58 th year. Furthermore, the social plans do not always provide for an increase in severance payments, but from a certain age they provide for a decrease of severance payments. 1.3 DISCRIMINATION BASED ON DISABILITY A prohibition against discrimination was laid down in the former Severely Disabled Persons Act, which was integrated into the Social Security Code IX 16 and became effective in July Disability is defined as being handicapped to the extent of at least 50 percent of normal functional ability 17. As per Social Security Code IX, according to German Civil Code 18, in principle, employers are not allowed to discriminate against severely disabled persons because of their disability with regard to establishing employment, career advancement, or termination of employment. The violation of this provision entitles the employee who has been discriminated against to claims for an adequate pecuniary compensation. 12 Kündigungsschutzgesetz (KSchG). 13 Section 10(2) KSchG. 14 Teilzeit- und Befristungsgesetz (TzBfG). 15 Section 14 (3) TzBfG. 16 Sozialgesetzbuch IX (SGB IX). 17 Section 2 (2) SGB IX. 18 Section 81(2) SGB IX and Section 611 a BGB. 5
6 German courts have granted the employer the right to ask an applicant whether he has a disability because of the additional financial burden 19 and thus for an objective reason. If the question is answered untruthfully, the employer may challenge the validity of the employment agreement unless the disability was apparent. 1.4 DISCRIMINATION BASED ON RELIGION OR RACIAL AND ETHNIC ORIGIN OR SEXUAL ORIENTATION Neither a protection against discrimination because of religion or racial and ethnic origin nor due to sexual orientation is given under German law. 1.5 SEXUAL HARASSMENT Female employees are not only discriminated against in hiring or other actions of the employers which cause them to come off worse than their male colleagues; discrimination also takes place in the form of sexual harassment at the workplace. In Europe, a recommendation of the European Commission "for the protection of the dignity of women and men at the workplace" was first made in 1991; 20 which resulted in the Act on Protection of Employees Against Sexual Harassment at the Workplace 21 in Germany. Regulations to prevent sexual attack were already provided for in criminal law, but they can comprise sexual harassment at the workplace only marginally. The particular situation of the work environment together with its existing subordinate relationships cannot be sufficiently taken into account here. In this respect, there are only special regulations for apprentices and minors. The act on employment protection defines sexual harassment as any deliberate, sexually intended behavior which injures the dignity of employees at the workplace. In addition to this general definition, some cases are cited as examples, such as sexual acts or demands, physical contact, or pornographic representations, as well as sexual comments. However, these descriptions also remain vague, so that the classification of an individual act as sexual harassment is often not easy. The act provides first of all for a right to file a complaint as a 19 Under German Law the employer has the duty to employ a certain number of disabled persons (Section 72 and 74 SGB IX). If he fails to meet this obligation, he has to pay a countervailing charge according to Section 77 SGB IX. 20 ABl. EG C 27/1992, of November 27, 1991, p. 4; RdA 1993, Beschäftigtenschutzgesetz (BeSchuG); Art. 10 of the 2 nd Equal Rights Act of June 24, 1994 (BGBl. I, 406). 6
7 possibility of action for the harassed employee. Every employee who feels harassed has the opportunity to file a complaint. The subjective impression of harassment is sufficient for this; whether the incident in question can also objectively be classified as sexual harassment is insignificant for the right to complain. Furthermore, the European Court of Justice requires no-fault damage claims. The German claim for damages in Section 611 a BGB, however, is only applicable to harassment by the employer. Civil law damage claims against the harassing colleague still require fault. 2 NEW EU- DIRECTIVES Based on Article 13 of the European Community Treaty, two antidiscrimination directives, the Directive implementing the principle of equal treatment between persons irrespective of racial or ethnic origin and the Directive establishing a general framework for equal treatment in employment and occupation, adopted in 2000, and a directive to revise the Equal Treatment Directive, adopted in 2002, will force German legislators to substantially change national law. The directives define minimum requirements; i.e., the EU Member States may also adopt more favorable provisions. In Germany the directives have not yet been transferred into national law. The government intends to implement the parts of the directives relating to employment in a consolidated Anti-discrimination Act on January 1, Other Member States, have already implemented them in part, e.g. France COMMON FEATURES It is interesting to note that the directives have a very broad scope of applicability. They are expressly applicable to the public sector and to the entire private sector. Various areas to which the principle of equal treatment is applicable are listed in the form of a catalogues. In particular, discrimination is prohibited in hiring and admission to an occupation, in promotions, in job training, continued training and general working conditions. The most significant aspect is that the Directives provide for a shifting of the prohibition against discrimination to the pre-contractual period. As mentioned above, up to now, the principle of freedom of contract and free discretionary power of selection applies under German law. 22 France has implemented the Equal Treatment and the General Framework Directive in a new Act of November 16,
8 They, therefore, apply to areas which, under existing German laws, are not directly subject to the prohibition against discrimination; included among those are the areas concerning admission to employment and occupational training. Under German law, therefore, the employer may arbitrarily refuse job applicants unless his decision constitutes gender- related discrimination or he discriminates against disabled persons. The definition of discrimination contains innovations in comparison with the previous directives: The definition includes insults, intimidation, and hostility at the workplace. The regulations thus include circumstances which, especially in U.S. law, are defined by the term "hostile work environment". Furthermore, the definition of discrimination includes harassment at the workplace. While previously objective criteria were essential for the definition of discrimination, subjective elements are emphasized in the new directive. According to this definition, it is considered to be prohibited harassment if a conduct is only "intended" to injure the dignity of the employee. Another particularity of the directives is the duty of the EU Member States to allow for actions taken by an association on behalf of individuals. Thus interest groups are also authorized, with the consent of the persons discriminated against, to file claims. Furthermore, the Anti-Racism Directive and the Directive to amend the Equal Treatment Directive of 1976 oblige the EU Member States to establish public bodies for the promotion of equal treatment of all persons without discrimination on grounds referred to in the corresponding directives. These bodies may form part of the agencies charged at national level with the defence of human rights or the safeguard of individuals rights. They shall provide independent assistance to victims of discrimination in pursuing their complaints about discrimination, conduct independent surveys concerning discrimination and publish independent reports and making recommendations on any issue relating to such discrimination. The provisions for the burden of proof are of great practical importance. Contrary to the principle that the plaintiff bears the burden of proof, in the case of discrimination, it is the defendant who is obliged to prove that there has been no violation of the principle of equal treatment. The requirement for the reversal of the burden of proof is, however, that the person who feels discriminated against has to present credible evidence that would allow the assumption that discrimination has taken place ( prima facie ). 2.2 THE DIRECTIVES IN DETAIL 8
9 2.2.1 EQUAL TREATMENT DIRECTIVE (RACIAL OR ETHNIC ORIGIN) 23 This directive, according to Article 1, intends to create "a framework to fight discrimination based on racial or ethnic origin". Compared to the other directives, the anti-racism directive has an even broader scope of applicability, since it includes welfare, health, and education, as well as involvement in public life GENERAL FRAMEWORK DIRECTIVE (RELIGION, DISABILITY, AGE AND SEXUAL ORIENTATION) 24 This directive intends, according to Article 1, to create "a general framework to fight discrimination based on religion or worldview, disability, age, or sexual orientation in employment and occupation with a view to the implementation of the principle of equal treatment in the Member States". The scope of applicability is expressly limited: The Directive does not apply to payments of any kind made by state schemes or similar, including state social security or social protection schemes. Protection against age discrimination, which has up to the present hardly been heeded, now has a stronger emphasis than before. The directive contains a list of exceptions, cases in which unequal treatment because of age is supposed to be justified; this list serves the purpose, however, of limiting the exceptions and thus guaranteeing better protection. The directive also generally prohibits discrimination because of disability. A specified restriction as the Social Security Code IX 25 is not intended, since the directive aims to ensure a broad protection of disabled persons REVISION OF THE EXISTING EQUAL TREATMENT DIRECTIVE (GENDER) Directive 2000/43/EC of June 27, 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin; ABl. Nr. L 180 of July 19, 2000, p Directive 2000/78/EC of November 27, 2000 establishing a general framework for equal treatment in employment and occupation, ABl. Nr. L 303, of December 2, 2000, p Section 81 SGB IX. 9
10 The Directive to amend the Equal Treatment Directive of 1976 was adopted by the Council and the European Parliament in 2002 and completes the two other Anti-discrimination directives which had already been adopted. This directive has to be implemented into national law in Germany by October 5, 2005 the latest. The directive clarifies the scope of application of the exemption provisions according to which an unequal treatment of women and men does not always constitute an unlawful discrimination. In this respect, the directive follows the legal practice of the European Court of Justice, which permits an unequal treatment of women and men only if the gender of the employee constitutes a determining factor of the occupational qualification and if the purpose is lawful and the requirement reasonable. It is thus, for example, allowed to exclude women from special combat units. A general exclusion from military services, however, constitutes an unlawful discrimination 27. As mentioned above, the term sexual harassment includes conduct aiming at injuring another person s personal dignity. The Commission considered it necessary to become active on this point because, although this "important and delicate subject" is not a new phenomenon, the legislature has largely ignored it up to now at the national as well as at the Community level. The new directive could make renewed activity in this area necessary in Germany. This applies, in particular, to the definition of harassment at the workplace. While objective criteria are essential for the definition of sexual harassment in the German Act on the Protection of Employees, it is also considered to be harassment if it is only "intended" to injure the dignity of the employee, even if such intention is not discernable by a third party. This seems to extend the protection of employees; in practice, it will be very difficult to prove that the harasser intended to injure the dignity of the employee. The special emphasis on cases in which the tolerance or rejection of harassing behavior becomes the basis for decisions affecting the harassed person indicates that the Commission has been influenced by the "quid pro quo" cases familiar from United States law. The new Directive contains a new regulation on sexual harassment at the workplace, which is defined for the first time as discrimination based on gender Directive 2002/73/EG of September 23, 2002 to amend Directive 76/207/EEC implementing the principle of equal treatment of men and women in occupation and employment; ABl. EG Nr. L 69/15 of October 5, European Court of Justice, 2000, Tanja Kreil v. BRD. 28 Article 2(3) Directive to amend Directive 76/207/EEC. 10
11 Up to now, the term "sex discrimination" was mainly applied to the relationship between employee and employer, while sexual harassment also emanates from colleagues or customers. The question whether and how the employer can be held responsible for the harassing behavior of a third person remains unanswered by the directive. 3 FUTURE LEGAL SITUATION IN GERMANY According to the new Anti-discrimination Act, the future legal situation expects various changes. As mentioned above, the regulations include circumstances which are defined as hostile environment. This has not been part of the German definition of discrimination so far, and it will be interesting to see how this provision is implemented in German law. It will, however, be difficult for the employer to prevent any such actions, since they may easily emanate from other employees and have equally detrimental effects on the work situation. The allowance for actions taken by associations on the behalf of individuals is also new in the German system. As of the shifted prohibition to a pre-contractual period, so far, it is not clear whether employers will only be able to demand "neutralized" job applications in future, as in the United States, which do not mention age, religion, gender, or disability. The discretionary power of the employer to make a selection among several applicants in the future also continues to be unclear. Even if age discrimination will be prohibited under the new Anti-Discrimination Law, it is unclear what the term "age" means. The directive could merely aim to protect older employees or generally establish that age may not play any role in the decision-making process of the employer. As mentioned above, on the one hand, German law favors older employees with regard to redundancies; on the other hand, the age of an employee sometimes has a negative effect on severance pay - older employees often receive less. It is doubtful whether this practice is in compliance with the directive. General age limits may probably remain valid, as the employer has in interest in an even age structure and continuous personnel planning by hiring also young people. Even age limits for certain professions will be probably justified as a legitimate goal 29, if they aim to secure the health of the employees and other persons. Age limits when hiring people will be void in the future, 29 In the sense of Art. 6 of Directive 2000/78/EC. 11
12 unless they are an indispensable requirement for the job or needed as of the necessary of a certain time period before the retirement. An unjustified refusal of elderly employers results in the legal consequence 30 of the employees right to claim a compensation. As, according to the Directives, the protection of disabled persons will not be limited to a specific degree of disability, as in the Social Security Code IX 31, disability, therefore, will be difficult to handle, since every degree of disability will be protected. The hitherto granted right of employer to ask an applicant whether he has a disability because of the additional financial burden and thus for an objective reason could be overthrown by the directive, since it provides that the employer must make arrangements to enable disabled employees to be admitted to employment. The Directives could be also the cause of serious changes in the area of equal treatment in employment, especially with regard to wages. The principle of equal treatment in employment is, first of all, applicable to collective regulations of the employer. Also, the employer may also arbitrarily exclude individual employees from the group of those benefited by such special payments. However, distinctions may be made for objective reasons. It is only to be considered as a violation of the principle of equal treatment in employment if the employer excludes individual employees without sufficient reason from general benefits and thus puts them in a weaker position than comparable employees. In contrast, according to the directive 32, it is to be considered direct discrimination if one employee is treated in a less favorable manner than another for the reasons named in Article 1. Hence, all dispositions of the employer which provide for conceivable distinctions with regard to the employees named in Article 1 of the directive could contain a prohibited discrimination in the terms of the directive. According to German law, up to now issues concerning remuneration were subject to freedom of contract. The principle "equal pay for equal work" is not the general basis for claims, so that wages may be freely negotiated between employer and employee. The principle of freedom of contract is limited, on the one hand, by minimum wage requirements of collective bargaining agreements for employers and employees bound by these agreements and, on the other hand, by the existing prohibition against gender-related discrimination. However, the general prohibition against discrimination contained in the directive could prove to have stronger effect in the future. Wage differences due to gender or 30 Of Art. 17 of Directive 2000/78/EC. 31 Section Directive 2000/78/EC. 12
13 one of the characteristics of Article 1 of the directive will remain unaffected. The employer will still be able to pay a male applicant with better references more than a woman with worse references even if they are both hired for the same job. As mentioned above, sexual harassment is now deemed to be a sub-group of sex discrimination. Thus, the provisions regarding the burden of proof and the legal consequences of Section 611 a German Civil Code will apply and, therefore, will facilitate sexual harassment claims aiming on an adequate pecuniary compensation. Recapitulating can be said, that the new Anti-discrimination Act will shift the still applicable principle of freedom of contract and free discretionary power of selection of employers in Germany. If the employer fails to meet the legal obligations, he exposes himself to claims for damages, which, so to speak, equals an obligation to contract. 13
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