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Entgelttransparenzrichtlinie: Was ist von der Umsetzung in Österreich zu erwarten?

In dieser Folge erörtern Ralf Peschek und Hemma Elsner die Kernaspekte der EU-Entgelttransparenzrichtlinie und deren Implementierung in Österreich. Die Richtlinie verfolgt das Ziel, die geschlechtsspezifische Lohnlücke zu verringern, indem sie für mehr Transparenz in der Vergütung von Mitarbeiter:innen sorgt und es diesen erleichtert, ihr Recht auf gleiche Bezahlung geltend zu machen. Die Umsetzung der Richtlinie stellt den österreichischen Gesetzgeber vor Herausforderungen, da bestimmte Regelungsinhalte unklar formuliert sind oder in dieser Form im österreichischen Recht bisher (noch) nicht existieren.

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Pay Transparency Directive: what to expect from it’s implementation in Austria

Episode Summary

In this episode, Ralf Peschek and Hemma Elsner discuss the key elements of the EU’s Pay Transparency Directive and how it may be implemented in Austria. The Directive aims to tackle the gender pay gap by increasing transparency regarding the remuneration of employees and making it easier for employees to enforce their right for equal pay. The task to implement the Directive will not be an easy one for the Austrian legislator, as certain aspects of it are either not clearly spelled out or do not currently exist in Austrian law.

Ensuring pay transparency

In order to create more transparency in terms of remuneration within a company, employers will be obligated to proactively inform their employees, in an easily accessible form, of the criteria used to determine and increase employee remuneration. These criteria must be objective and gender-neutral. The following factors included in the recitals are mentioned as examples: skills, effort, responsibility and working conditions. 

However, these factors do not have to be recognised to the same extent but can be weighted within the framework of a flexible system depending on their relevance for the individual employee. If other criteria are also justified, these can also be taken into account. An example of this would be the personal performance of the individual employee.

The novelty for Austria is that the Directive not only compels the disclosure of specific figures, but also requires a generic explanation of how the remuneration structure is organised in a company (i.e a remuneration policy). Something similar already exists in the banking sector, where companies must also publish remuneration policies. These regulations and similar requirements, already enshrined in stock corporation law, could serve as a model for legislators and steer them towards a “gender pay gap remuneration policy” solution.

Reporting obligations

Employers will have an obligation to prepare reports on remuneration and submit them to the designated monitoring bodies. In Austria, in our view, the role of the monitoring body could be carried out by the Ombud for Equal Treatment. Employers must then make the core information from the reports available to their employees, and publish the reports in full, either on their website or on another appropriate information platform. The frequency of these reports will depend on the number of employees in the company. 

The aim of regular reports is for  employers to assess and monitor their specific pay structures and thus proactively comply with the principle of equal pay. These reports should also help the relevant authorities, employee representatives and other interested parties to monitor the pay gap. Finally, individual employees could use information from those reports to assert their claims.

Within reports on equal pay, remuneration figures are to be provided on an aggregated level. The Austrian Equal Treatment Act already provides for something similar – namely income reports. It would be advisable that regulators harmonise these reports in order to avoid any double-tracking.

H how to make these provisions on information disclosure work in practice is an open-ended question. Most likely. legislators will have to introduce an enforceable right to information, which can then be asserted by interest groups or employee representatives, and labour supervisory authorities. 

Joint pay assessment

The Directive introduces a new instrument to help correct and prevent gender-related pay gaps. It will become mandatory to conduct a joint pay assessment if there is a gender pay gap of 5% or more, which cannot be justified by objective gender-neutral criteria. Employers will have to work together with employee representatives to analyse the gaps, identify the reasons for them and define measures to eliminate the unjustified differences. The Directive however, provides for a grace period of six months from the reporting date for employers to correct disparities on their own.  

The stumbling block will be when an employer and employee representatives are not able to come to an agreement. The Directive does not provide much guidance on this issue, and it will be up to the Austrian legislator to determine how to resolve such situations. 

Another question is, who the counterparty to employers will be: a trade union at the industry level or a works council in a particular company. In Austria, trade unions and collective agreements have adequate powers for remuneration rules, but trade unions have no practical experience within a specific company. Works councils, however, have the know-how in terms of the salary structure and process within their employer’s company, however, they cannot legally set remuneration due to a lack of legal competencies. Therefore, in Austria, it should be works councils who work with employers in order to determine the measures for the elimination of the pay gap. Nevertheless, that means that works councils must be given appropriate co-determination rights by the legislator, for example, in the form of an enforceable shop agreement for such joint pay assessments. Accordingly, conciliation committees may come into play in instances when parties fail to reach a shop agreement on such joint pay assessments and inherent improvement measures. Such conciliation committees have not been used very often in Austria to-date, apart from cases involving social plan negotiations. It would be interesting to see if the role of conciliation committees will become more prominent by taking on disputes related to joint pay assessments.

In the event that legislators opt only for administrative penalties for non-compliance, the assessment of the content of these joint pay assessments will only take place at a criminal law level with the administrative authorities. How effective this route will be for a successful implementation of measures is questionable. We shall see how legislators approach this topic, as this goes deep into systemic questions of Austrian labour law and involves socio-political considerations.

Employee rights

The Directive grants employees the right to receive, on request, written information of their individual pay compared to the average pay levels for the group of employees who perform the same work, or work of equal value, broken down by gender. The employer must provide the information to the employee within a reasonable period of time, but no later than within two months from the date of the request. Employees will also have the right to request additional clarification and details if the data provided is incomplete or incorrect.

It remains to be seen how the enforceability of the right to receive the information will be shaped in the Austrian implementation of the Directive.

Facilitation of enforcement

The directive also makes it easier to provide evidence of equal or equivalent work. It allows one to compare themselves to an employee at another company or even fictitious employees. However, one prerequisite in this instance is that the main pay conditions are determined by the same source. This may be the case, for example, with collective bargaining agreements or in a group of companies. Furthermore, employees can use statistical methods to define a comparable value of remuneration.

Reversal of burden of proof and access to evidence

Similar to the Equal Treatment Act, the Directive lowers the burden of proof for the employee. The employee only has to credibly demonstrate that discrimination has occurred, and the employer bears the full burden of proof that this gender-specific difference is not discriminatory. 

The Directive also imposes a complete shift of the burden of proof also onto employers who are non-transparent and do not fulfill their reporting obligations, as this will not allow them to bypass the Directive’s goals.

Another novelty is the facilitated access to evidence. The courts shall be able to order the defendant to disclose evidence (including confidential evidence) that is at their disposal during proceedings. This is a new principle for Austria and the legislator will have to create a new judicially enforceable submission obligation. The implementation of the Directive in Austria may result in an obligation to produce not only documents, but also information, if documents on certain topics do not exist.

Enforcement measures

In case of violations of pay transparency rules, the courts can impose an injunction and order the implementation of measures by the employer to comply with pay transparency rules. Such measures could be, for example, that the employer must draw up an action plan, inform employees about their rights, or provide training to responsible staff.

In our opinion, it would be strongly advisable that the imposition of such measures be regulated by law and that compliance may also be enforced, whereby the possibility of legal action would then probably be in the good hands of employee representatives and the Ombud for Equal Treatment, (or a designated equivalent).

Compensation for damages

The Directive provides for compensation for all damages resulting from a pay gap, including compensation of lost profits and non-material damages, and does not allow for an upper limit to the amounts of said compensation. In addition, there should also be effective, proportionate and dissuasive (administrative) sanctions. In Austria, for example, this could be enforced in the form of administrative penalties.

Procedural costs

An employee bringing an action may not have to bear the procedural costs despite losing the case, according to the Directive. This may apply if the employee had legitimate grounds for asserting the claim and a reasonableness test is in the employee’s favour. This reasonableness test, despite the loss of the case, will have to be introduced in Austria.

Limitation periods

The statute of limitations is set at three years, beginning from the time when the employee becomes aware of an offence or can reasonably be expected to be aware of it. There is therefore a subjective element that does not exist in the limitation period for other remuneration claims under labour law. However, collective or contractual defaults and forfeiture periods are not affected by the Directive and can continue to exist.