Kliemt & Vollstadt
www.kliemt.de
Overview
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 UK 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:
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all employees and trainees,
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applicants for a job and former employees,
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persons of similar status to employees due to their economic dependency and persons working at home
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commercial agents and other self-employed,
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managing directors and members of the managing board. However, 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.
There is no differentiation between old and young individuals (as in the US 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):
Soldiers are not protected by the AGG, but by a separate Equal Treatment Act which does not protect them against age discrimination (Federal Administrative Court – 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 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 reqpresentation). 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 (Federal Labour Court – 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 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:
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review existing personal questionnaires and documents;
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avoid direct questions with regard to age in the interview;
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conduct interviews always together with a second person present; and,
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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) 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.
The Higher Labour Court (Landesarbeitsgericht) of Berlin-Brandenburg (11 September 2008 - 20 Sa 2244/07) decided that a remuneration system which increases the base salary only dependent on employees’ age is age discrimination and cannot be justified. The plaintiff was aged 39 and received his base salary according to this age. He sued his employer to receive the highest possible wage which is granted when reaching the age of 47. The court ruled in favour of the plaintiff. The Federal Labour Court (Bundesarbeitsgericht - 20 May 2010 - 6 AZR 148/09 A) referred the question to the European Court of Justice for a preliminary ruling whether such a system of remuneration complies with Directive 2000/78/EC. The discussed system of remuneration was provided by a bargaining agreement for public employees without civil servant status (Bundes-Angestelltentarifvertrag, BAT).
Are there any specific exceptions in your laws?
The AGG is not applicable with regard to 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 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.
Retirement ages
In Germany, the current legal retirement age is 65. It will be increased between 2012 und 2029 step by step from 65 to 67. 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, as in the UK, an employee can be forced to retire upon reaching the retirement age.
In Hesse (Federal State of Germany) the employment agreement of a civil servant is terminated by law as soon as he reaches the age of 65. This provision is valid in view of the Higher Administrative Court of Hesse (Hessischer Verwaltungsgerichtshof - 28 September 2009 - 1 B 2487/09). The Administrative Court in Frankfurt (Verwaltungsgericht Frankfurt - 29 March 2010 - 9 K 3854/09.F) referred the question to the European Court of Justice for a preliminary ruling whether this provision complies with Directive 2000/78/EC.
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.
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. The Federal Labour Court (Bundesarbeitsgericht - 17 June 2009 - 7 AZR 112/08 (A)) referred the question to the European Court of Justice for a preliminary ruling whether such a provision for pilots in a bargaining agreement complies with Directive 2000/78/EC.
Interesting cases
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 “Kücükdeveci 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.
In North Rhine-Westphalia (Federal State of Germany) there is a maximum age of 35 years when applying for public service. The Higher Administrative Court (Oberverwaltungsgericht Nordrhein-Westfalen – 15 March 2007 - 6 A 4625/04) held this is acceptable and justified, because it provides an appropriate relation between time of active duty and the claim for pension after retirement, especially with regards to the training and education which is necessary to perform the job. There also is a public interest in a long period of service of civil servants because the financial burden of their generous old age pensions has to be borne by the general public. Another objective of the age limit was to provide a well balanced aging structure. However, the Federal Administrative Court (Bundesverwaltungsgericht - 19 February 2009 - 2 C 18/07) annulled this judgement. The age limit was enacted by the administration not by the legislation. Furthermore, the provision did not contain exceptions for applicants who had been in parental leave or basic military service or for severely disabled persons.
A nursery nurse received €1,000 as compensation for immaterial damage (i.e. pain and suffering) caused by age discrimination. She had worked in a public day-care centre run by the German Federal State of Berlin. The State of Berlin established a job pool for those of its employees who were redundant in their workplace in order to deploy them wherever they are needed. The group of redundant employees was determined by taking into account the social criteria age, seniority, maintenance duties and severe disability. In the public day-care centre all nursery nurses older than 40 years were supposed to be redundant. The State Berlin argued that this was necessary in order to safeguard a well-balanced age structure, but it did not explain why a well-balanced age structure was necessary, how it should look like and how it could be reached. The Federal Labour Court (Bundesarbeitsgericht - 22 January 2009 - 8 AZR 906/07) held this discrimination was not justified.