Labour law and HR consulting Fair compensation or discrimination? Pay raises for junior employees under scrutiny
Better pay conditions for later-hired employees?
In Case No. II PK 236/14, a group of prosecutors filed a lawsuit against the District Prosecutor's Office, seeking compensation for unequal treatment in employment. They argued that they were granted a promotion-based pay raise only after completing ten years in their positions, whereas colleagues hired later received it earlier. The plaintiffs viewed this as discrimination, with the hiring date being the discriminatory criterion.
The Supreme Court, when examining this case, emphasized that differences in remuneration must be based on objective criteria rather than arbitrary employer decisions. The court ultimately dismissed the plaintiffs' claims, ruling that the pay disparities were in accordance with applicable regulations. The key factor was the statutory provisions governing prosecutors' remuneration, which precisely defined the rules for pay progression. The Court found that, in this particular case, the date of employment did not constitute a discriminatory criterion, and the employer had not violated the principle of equal treatment in employment.
However, in its ruling, the Supreme Court highlighted that granting a higher pay rate before the required period of service on a given position is impermissible and violates binding legal provisions. Employers must pay special attention to compliance with regulations and avoid arbitrary decisions that could lead to unequal treatment of employees.
Employer obligations
According to Article 183b § 1 of the Labour Code, employers are required to ensure equal treatment in remuneration, regardless of gender, age, disability, race, religion, nationality, political beliefs, trade union membership, ethnic origin, creed, sexual orientation, as well as employment duration and working hours. EU law, including equality directives, also imposes an obligation on employers to provide equal pay conditions.
It is essential that an organization's remuneration system remains transparent and based on objective criteria such as length of service, qualifications, or professional achievements. Criteria such as hiring date or membership in a specific professional group may lead to claims of unequal treatment if they lack proper justification in specific regulations (as demonstrated in the discussed case). Employers should periodically review employee salaries and internal policies for compliance with anti-discrimination laws.
Summary
Pay discrimination constitutes a serious violation of labour law that may result in significant legal and financial consequences for employers. It is crucial that employers act transparently, base their decisions on objective criteria, and regularly review their remuneration policies. Only by doing so can they ensure equal treatment of all employees and avoid legal disputes related to pay discrimination. This issue is particularly relevant in light of the forthcoming EU Pay Transparency Directive (Directive (EU) 2023/970 of May 10, 2023), which will come into force in 2026 to strengthen equal pay for men and women for the same work or work of equal value.
The Supreme Court ruling in Case No. II PK 236/14 underscores that compliance with labour law and the application of objective remuneration criteria are essential in preventing discrimination claims. While the ruling pertains specifically to prosecutors, its conclusions have universal significance for all employers.
If you have concerns regarding your organization's pay policies or wish to ensure compliance with labour law, our employment law team encourages you to reach out.
