This summary of age discrimination law in Germany has been prepared by Kliemt & Vollstädt, the Ius Laboris member for Germany: www.kliemt.de
On 18 August 2006, the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG) came into force. The AGG implements the Framework Directive 2000/78/EC as well as Directives 2000/43/EC, 2002/73/EC amending Directive 76/207/EEC and 2004/113/EC. The aim of the AGG is to prevent and abolish discrimination on various grounds including age. The law protects against direct and indirect discrimination as well as harassment.
Different treatment does not constitute discrimination if it constitutes a genuine and determining occupational requirement provided that the objective is legitimate and the requirement is appropriate (Sec. 8 AGG / Art. 4 Directive 2000/78/EC). Apart from that, different treatment regarding age is permitted if it is objectively and reasonably justified. As in the law, there must be a legitimate aim and the means of achieving this aim must be appropriate and necessary (Sec. 10 AGG / Art. 6 Directive 2000/78/EC). Sec. 10 Sentence 3 AGG lists 6 examples for permitted measures: No. 1-3 implementing Art. 6 para. 1 a-c Directive 2000/78/EC, No. 4 implementing Art. 6 para. 2 Directive 2000/78/EC. No. 5 and 6 are explained below.
Victimisation is prohibited, i.e. the employer is not allowed to subject an employee to adverse treatment because the employee has exercised his rights according to the AGG or refused to carry out instructions violating the AGG. The same applies to persons who support the employee against such treatment or testify as witnesses (Sec. 16 AGG / Art. 11 Directive 2000/78/EC).
Who is covered?
The persons who are protected by the AGG are listed in Sec. 6 AGG. These are:
- all employees and trainees,
- applicants for a job and former employees,
- persons of similar status to employees due to their economic dependency and persons working at home
- commercial agents and other self-employed,
- managing directors and members of the managing board. According to Sec. 6 AGG, they are only protected in terms of access to employment (i.e. not in terms of the termination of the service contract) and career advancement (e.g. becoming the chairman of the board). They are not protected in all respects, since they are not considered to be employees under German law. However, in the wake of the “Danosa decision” of the European Court of Justice of 11 November 2010 (C-232/09) which awards employee rights deriving from the Maternity Protection Directive 92/85/EEC even to third-party managers (Fremdgeschäftsführer) it is controversial whether this limitation of protection against discrimination to the access to employment is commensurate with the European law. A high court decision on this question has not been passed yet.
There is no differentiation between old and young individuals (as in the law); both old and young receive the same level of protection.
The law is only applicable in a limited way on the following groups due to their legal status as parts of the public service (Sec. 24 AGG):
- civil servants;
- judges; and,
- individuals doing social service in lieu of military service.
Soldiers are not protected by the AGG, but by a separate Equal Treatment Act which does not protect them against age discrimination ( – Bundesverwaltungsgericht – 18 October 2007 - 1 WB 67/06).
Furthermore, the AGG applies between trade unions and associations of employers on the one hand and their members on the other hand and also to associations whose members carry out a particular profession (e.g. craft guild, Chamber of Lawyers). See Sec. 18 AGG / Art. 3 para. 1d Directive 2000/78/EC. In addition, the AGG applies to associations who hold a dominant position of power in the economic or social sector, if a fundamental interest in the acquisition of membership exists.
What enforcement/remedies do exist?
A direct or indirect discrimination only has consequences in civil law. In severe cases, harassment can be considered as defamation resulting in criminal sanctions according to the German Criminal Code.
Enforcement is a matter of the person affected.
The Federal Anti Discrimination Agency (www.antidiskriminierungsstelle.de) can support victims of discrimination by informing them about their rights, connecting them with counsellors/advisors and offering mediation (Sec. 25-30 AGG, not mentioned in Directive 2000/78/EC, but in Directives 2000/43/EEC, 76/207/EEC and 2004/113 EC).
Victims can also be supported by an anti-discrimination organisation (Antidiskriminierungsverband) which is authorised to act in court proceedings as a legal advisor where representation by an attorney is not required by law (i.e. in the labour courts of first instance, much like the UK Employment Tribunals, parties do not need to have legal representation). See Sec. 23 AGG / Art. 9 para. 2 Directive 2000/78/EC.
The AGG contains several civil remedies:
Victims can appeal to a complaints board that has to be established by the employer (Sec. 13 AGG / without counterpart in the European Directives). If a works council exists, it has a right of co-determination concerning the initiation and organisation of the complaints procedure, but is not involved in the appointment of the members of the complaints board and where it is located (Federal Labour Court – Bundesarbeitsgericht – 21 July 2009 - 1 ABR 42/08).
If the employer takes no measures or obviously unsuitable measures to stop harassment in the workplace, the employee is entitled to stop working without loss of pay under certain requirements (Sec. 14 AGG only - there is no equivalent law in the European Directives dealing with this). However, the employee bears the risk that the requirements are not fulfilled, i.e. the employer might be entitled to dismiss the employee (after giving a warning), because he refused to perform his contractual tasks.
Victims can claim compensation for financial loss. This claim requires that the employer is responsible for the breach of duty, because he acted in a negligent way or with intent. The victim can also claim appropriate compensation for immaterial damage (i.e. for pain and suffering). A claim does not require that the employer acted in a negligent way or with intent. The compensation has to be proportionate (criteria in order to determine the compensation are for example: direct or indirect discrimination? intent or no responsibility? repeat offender or not?) and punitive in order to avoid repetition. The victim can assert both claims, i.e. compensation for financial loss and in addition for immaterial damage (Sec. 15 AGG / Art. 17 Directive 2000/78/EC).
In a case where the discrimination occurs during the application process, the applicant can claim the salary he would receive in the job he applied for as compensation for financial loss. However, this claim is limited to the amount he would receive in the job until the earliest possible termination date. Furthermore, the applicant can claim compensation for immaterial damage. However, this claim is limited to three months' salary if he would not have been hired even if the application process had been free from discrimination. The applicant cannot force the employer to enter into an employment relationship. In any case, the victim must claim compensation in writing within a period of two months. Following this, the victim must file a law suit within a period of three months after asserting the claim in writing, Sec. 61b Labour Court Act.
In workplaces where a works council exists or could be elected, the works council or a trade union represented in the workplace can file for injunctive relief if the employer grossly violates the AGG (Sec. 17 para. 2 AGG only - there is no equivalent law in the European Directives dealing with this). The works council or the trade union can also claim remedies, but they are not allowed to assert claims on behalf of the single employee. The works council can claim e.g. that the employer is not allowed to use an internal job advertisement searching for “employees in their first year of service” with the company ( – Bundesarbeitsgericht – 18 August 2009 - 1 ABR 47/08). In this case the works council had shown that the employees in the first year of service are 6-13 years younger than employees in the second or third year of service. The employer could not explain that he needed only employees in the first year of service in order to reach a legitimate aim.
In a case where a person was excluded by a trade union, association of employers or similar association or a member was discriminated against, he can claim membership or participation in the association (Sec. 18 para. 2 AGG / Art. 3 para. 1d Directive 2000/78/EC).
How common are claims?
There are no recent detailed statistics on the impact of the AGG. In general, the consensus is that there are far less claims and lawsuits than expected when the AGG entered into force (August 2006). The Higher Labour Court (Landesarbeitsgericht) of Baden Württemberg published a statistic covering the period from 18 August 2006 to 18 April 2007. Within these ten months there were 109 claims based on discrimination, 50% of them ending with a settlement. According to this, the most common kind of discrimination is on the grounds of age (36%) followed by gender (28%), disability (18%) and ethic origin (11%). The Federal Anti Discrimination Agency was contacted by 4,680 persons in the period from August 2006 to March 2010 and 18.95% of the enquiries referred to age discrimination.
What claims are most common and what are trickiest issues for employers?
Problems under all heads of discrimination (not just age) may occur during the process of recruitment of an employee. Job advertisements have to be carefully checked for discriminatory content (e.g. “We are looking for a young secretary to support our young dynamic team.”), and interviewers conducting interviews with candidates must be wary of asking the wrong questions, for example: “How old are you?” Therefore it is recommendable to:
- review existing personal questionnaires and documents;
- avoid direct questions with regard to age in the interview;
- conduct interviews always together with a second person present; and,
- carefully document personnel decisions.
It could be said that age discrimination holds the highest liability risk for employers.
A large financial risk may arise out of a so called Social Plan concluded by the employer and the works council in case of operational changes, especially mass redundancies, to compensate disadvantages for the employees. Social Plans that discriminate a group of employees (e.g. young employees) by granting another group of employees (e.g. older employees) disproportionately greater benefits must be corrected in a way so that the discriminated group also gains the same level of benefits. However, a Social Plan can differentiate benefits if it contains a severance payment provision staggered according to age or seniority in which the chances on the labour market are taken into account by a relatively strong emphasis on age, or employees are excluded from the benefits of the Social Plan who are economically secured because they are entitled to national old-age pension immediately or after receiving unemployment benefits (Sec. 10 Sentence 3 No. 6 AGG). The Federal Labour Court (Bundesarbeitsgericht - 26 May 2009 - 1 AZR 198/08, confirmed 12 April 2011 - 1 AZR 764/09) held this provision complies with Directive 2000/78/EC and therefore a Social Plan can grant lower severance payments or none at all for older employees.
According to the European Court of Justice in the “Hennigs” and “Mai” cases, a remuneration system provided by a bargaining agreement for public employees without civil servant status (Bundes-Angestelltentarifvertrag, BAT) which increases base salary by sole reference to employees’ age is age discrimination. This discrimination cannot be justified arguing that higher financial requirements of older employees due to their social situation shall be compensated. Merely the intention to remunerate professional experience might be a reason for such distinction between older and younger employees. However, this can only be assumed if the criterion is the length of service instead of the employee’s age. That said, the Court assumes that in exceptional cases even such discriminating remuneration system might be consistent with EU law. This is where the remuneration system only serves to preserve acquired possession of the employees during a period where a former discriminatory remuneration system is replaced by a system not referring to discriminatory attributes at all.
Are there any specific exceptions in your laws?
The AGG does not apply social security benefits (Sec. 2 para. 2 AGG) which are covered by the Social Security Code including a prohibition of age discrimination and not to company pension schemes which are covered by the Act for the Improvement of Company Pension Plans.
The AGG is not applicable to dismissals (Sec. 2 para. 4 AGG). This lacuna in the law is considered as a violation of the European Directives, but the contradiction to European Law is solved by the Federal Labour Court (6 November 2008 – 2 AZR 523/07) by interpreting Dismissal Protection regulations in accordance with the AGG: If an employee has been dismissed and he is protected by the Dismissal Protection Act, he can claim that the dismissal has to be socially justified. Social justification requires either operational reasons or reasons related to the conduct or the person of the employee. In case the employee was dismissed for being “too old” he can claim that the age itself is not a sufficient reason related to the person of the employee and therefore the dismissal is not socially justified. In case the dismissal is based on operational reasons the employer has to adapt the number of employees to the reduced number of workplaces. In a so called social selection he has to select the employees who will be dismissed taking into account social criteria (i.e. age, seniority, maintenance duties and severe disability). The employee who would suffer most from a dismissal should be dismissed last. Thus, the employer can make differences in treatment on grounds of age due to the Dismissal Protection Act, but he has to justify these differences due to the AGG. The dismissal cannot be socially justified in case it does not comply with the AGG. In case the employee is not protected by the Dismissal Protection Act, he can claim that the dismissal is against public policy, because it does not comply with the AGG. The employee is entitled to initiate a lawsuit to contest the legality of the dismissal. If the court holds that the dismissal is not socially justified or against public policy, the employment relationship has to be continued, i.e. the employee is reinstated. If the dismissal is valid, the employee loses his job without any severance payment.
In Germany, the legal retirement age was recently raised from 65 to 67 (for individuals born 1964 or later). There are transitional regulations (Übergangsvorschriften) for employees born between 1947 and 1963 increasing the legal retirement age by progressive stages from 65 to 67. For individuals born before 1947, the legal retirement age remains 65. The employment contract expires if it is limited to the legal retirement age. If not, an employee reaching the retirement age must be given notice of termination or the employment contract must be terminated by mutual agreement. Sec. 10 Sentence 3 No. 5 AGG expressly permits an agreement terminating the employment contract as soon as the employee can apply for old-age pension. Therefore, an employee can be forced to retire upon reaching the retirement age.
In some Federal States of Germany a different legal retirement age applies for civil servants. E.g. in Hesse the employment contract of a prosecutor (Staatsanwalt) is terminated by law as soon as he reaches the age of 65. In some circumstances, if it is considered to be in the interest of the prosecution service, the retirement may be deferred until the age of 68. This provision presuming an incapability for work as of the age of 65 is valid in view of the European Court of Justice (21 July 2011 – C-159/10 “Fuchs” and C-160/10 “Köhler”), since the inherent discrimination is justified by legitimate objectives such as a favourable age structure, efficiency of the justice administration and avoidance of legal disputes concerning the effective capability of older prosecutors.
The office of a notary is terminated by law as soon as he reaches the age of 70. The Federal Court of Justice (Bundesgerichtshof - 22 March 2010 - NotZ 16/09) held this provision complies with Directive 2000/78/EC.
The statutory maximum age for independent, publicly appointed and sworn experts is 68 years. The Federal Administrative Court (Bundesverwaltungsgericht) held that this age limit is justified by legitimate objectives, since their mental and physical capacity is of crucial importance but generally declines with age (26 January 2011 – 8 C 45.09 and 45.06).
Before the AGG entered into force, the Federal Labour Court has accepted an age limit of 60 for pilots in a bargaining agreement because that serves to protect the life and health of third parties and the pilots receive benefits by the employer until they reach the retirement age (Bundesarbeitsgericht – 21 July 2004 - 7 AZR 589/03). This decision was later confirmed with regard to the AGG by the Higher Labour Court of Hesse (Landesarbeitsgericht Hessen - 15 October 2007 - 17 Sa 809/07). The plaintiffs appealed to the Federal Labour Court which referred the question to the European Court of Justice (17 June 2009 - 7 AZR 112/08 (A)). The European Court of Justice held (13 September 2011 – C-447/09 “Prigge”) that the age limit of 60 stipulated in the bargaining agreement constitutes a direct discrimination on grounds of age which may not be justified arguing that older pilots may not be capable to pursue their professional activities and may therefore endanger the general public. This is because international and national statutory provisions for pilots schedule a compulsory age limit of 65 years. Previously, during the age between 60 and 65 these provisions only provide for certain restrictions for older pilots (e.g. monitoring through a second pilot younger than 60). Against this background a regulation in a bargaining agreement providing for a deviating compulsory age limit of 60 is invalid.
The “Mangold decision” of the European Court of Justice dated 22 November 2005 (C-144/04) concerned fixed-term employment contracts with older employees. According to Sec. 14 para. 3 of the Part-Time Work and Fixed-Term Employment Contracts Act no objective reason was necessary to enter into an employment contract of limited duration if the employee reached the age of 52. The ECJ held this provision violated Directive 2000/78/EC and may therefore not be applied by national courts. According to the amended Sec. 14 para. 3 no objective reason is necessary to agree on a fixed-term employment contract limited up to five years if the employee reached the age of 52 and was unemployed for at least four months immediately prior to the fixed-term contract or in case he received transfer short-time allowances or took part in a state-aided employment measure.
The “Kücükdevici decision” (see here for a report) of the European Court of Justice dated 19 January 2010 (C-555/07) concerned the German provision for calculating the notice period. According to Sec. 622 of the German Civil Code the basic notice period is four weeks to the 15th or to the end of a calendar month. It is increased step by step taking into consideration the seniority of the employee up to seven months to the end of a calendar month after 20 years of service. In calculating the length of employment, periods of employment completed by an employee before reaching the age of 25 are not taken into account. The ECJ held the latter violated Directive 2000/78/EC and may therefore not be applied by national courts.
The decision of the Federal Labour Court dated 20 March 2012 (9 AZR 529/10) concerned the grading of holiday entitlements in accordance with the employee’s age. Age related-scales regarding holiday entitlements are often included in collective bargaining agreement and stipulate that the entitlement shall be proportionally according to the employee’s age. After the AGG entered into force, the Regional Labour Court of Berlin-Brandenburg (24 March 2011 – 20 SA 2058/09) as well as the Regional Labour Court Düsseldorf (18 January 2011 – 8 Sa 1274/10) stated that such age-related scales constitute discrimination on grounds of age which is not justified under Sec. 10 Sentence 3 No. 1 AGG. Generally, the proportional increase of holiday entitlements may protect a possible enhanced need of recuperation of older employees. However, it is assumed that an age-related scale beginning with the age of 30 does not indicate such legitimate objective, since employees within the age of 30 do not fall under the scope of application of Sec. 10 Sentence 3 No. 1 AGG. The Federal Labour Court confirmed this decision of the Regional Labour Court of Berlin-Brandenburg on 20 March 2012.
The decision of the Federal Court of Justice (Bundesgerichtshof) dated 23 April 2012 (II ZR 163/10 ) concerned – for the first time – the question of whether the AGG is applicable to members of corporate bodies. Under Sec. 6 para. 3 AGG the application is limited to managing directors as far as conditions for access to gainful employment and promotion are affected. However, the Court does consider the provisions of the AGG to be applicable as well if a managing director, whose service contract and appointment has ceased due to the lapse of prescribed time limits, re-applies for the position as managing director. Thus, the company was held liable for discrimination on grounds of age since it did not renew the contract with the older managing director but appointed and employed a younger one. However, the Court did not clarify the question whether the AGG shall be applicable to the conditions of termination of the managing directors’ service contract as well. This is – as already pointed out – controversial since the European Court of Justice adopted its “Danosa”-decision of 11 November 2011.