equal-pay

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Federal Labour Court specifies requirements for deviations from equal-pay principle

The German Federal Labour Court just ruled that, if a lender aims to be exempt from the equal-pay principle by referring to collective bargaining agreements applicable to the temporary work sector, the employment conditions may not deviate from the CBAs to the disadvantage of the employee.

As a general rule, the equal-pay/equal treatment principle applies to personnel leasing structures in Germany. Personnel leasing companies may, however, deviate from this principle, if collective bargaining agreements (CBAs) for personnel leasing are being referred to in the individual employment agreement. In such case, the personnel leasing company may remunerate the leased employee in accordance with such CBAs and is not obliged to pay the remuneration of a comparable employee in the company that the temporary worker is posted to.

Facts

The employment contract of the plaintiff referred to CBAs applicable to the personnel leasing sector. Despite the reference, however, some contractual conditions deviated from what was provided for in the CBAs, to the detriment of the employee. He then claimed for payment of a higher salary, which corresponded to the remuneration of a comparable employee of the undertaking to which he was posted.

Decision

According to the ruling of the Federal Labour Court (4 AZR 66/18), the plaintiff was in fact entitled to claim additional remuneration. An agreement, which validly differs from the principle of equal-treatment, must mandatorily refer to relevant CBAs of the personnel leasing sector (in its entirety). In case the employment contract still contains conditions, which deviate from the CBAs to the detriment of the temporary worker, this requirement is not met.

Practical advice

The ruling again shows how carefully personnel leasing constellations must be designed and implemented, as inaccuracies can not only lead to claims to additional remuneration, but also bring about payment obligations for outstanding social security contributions. According to the Federal Labour Court, cherry picking is unlawful and not admissible.

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