Equal rights for employees and freelancers


Introduction

On 25 June 2020 the Federal Labour Court ruled in a dispute concerning a freelancer’s information claim regarding her colleagues’ salary levels. The judgment is the first fundamental decision with respect to the Transparency in Remuneration Act (EntgTranspG). Pursuant to this decision, both employees and freelancers who receive their compensation mainly from one client can make information claims regarding the salary levels of their colleagues with comparable duties.

The term ’employee’ in the EntgTranspG must be interpreted in accordance with not only national law, but also EU law. Thus, the EntgTranspG’s scope is broader than the wording in Section 5, Paragraph 2(1) of the EntgTranspG implies.

Background

The plaintiff had been an editor for the defendant, a public television station in Germany, since 2007. She originally worked in online editing based on a fixed-term contract. However, since 2011, she had worked for the defendant as a freelancer on the basis of an indefinite-term contract. The plaintiff requested from the defendant pay equal to that of her male colleagues. She submitted a request to the defendant under Section 10 of the EntgTranspG requesting information about the criteria and practices used to establish the level of remuneration with respect to both her own remuneration and the remuneration of other comparable colleagues.

The defendant rejected the plaintiff’s information claim, arguing that she was not an employee. In the defendant’s opinion, only employees and not freelancers could make information claims regarding the remuneration of other comparable colleagues.

With her action, the plaintiff formally requested information from the defendant. She argued that the term ’employee’ in Section 5 of the EntgTranspG includes freelancers when they are financially dependent on one client because such freelancers are comparable with employees.

The Berlin Regional Labour Court decided that the plaintiff was a freelancer and not an employee; thus, she was not entitled to request information under the EntgTranspG.

Following the Berlin Regional Labour Court’s negative judgment, the plaintiff pursued her claim before the Federal Labour Court.

EntgTranspG’s purpose

In 2017 the EntgTranspG came into force. The act’s purpose is to enforce the right to equal pay for women and men for equal work or work of equal value. Female and male employees perform equal work if they carry out identical or similar activities at different workplaces or successively at the same workplace.

Federal Labour Court decision

The plaintiff’s appeal to the Federal Labour Court was successful. The court confirmed that she could request information from the defendant under Section 10 of the EntgTranspG (ie, information on the criteria and practices used to establish the level of remuneration) because she was an employee in accordance with Section 5 of the EntgTranspG. The term ’employee’ in this section must be interpreted broadly in accordance with EU law. Without such a broad interpretation, the EntgTranspG’s purpose would not be achieved. The requirement for broad interpretation applies even more because no other national law – not even the General Act on Equal Treatment – enforces the right to equal pay for women and men for equal work or work of equal value.

Due to the broad interpretation of the term ’employee’ in Section 5 of the EntgTranspG, it is not only employees who are protected by the EntgTranspG, but also freelancers where they are financially dependent on one client.

Practical consequences

With this decision, the Federal Labour Court has strengthened freelancers’ rights. Companies must be aware that the meaning of the term ’employee’ under national law can differ. Whenever national employment-related law is based on EU law, the meaning of the term ’employee’ is broad. In its decision, the Federal Labour Court ruled that the term ’employee’ in Section 5 of the EntgTranspG includes freelancers who are financially dependent on one client. Consequently, such freelancers can make information claims under the EntgTranspG against their contract partner with respect to the criteria and practices used to establish remuneration levels.



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