Source: theHRDIRECTOR
Date: December 2006 

The coming into force of the age discrimination regulations, together with other directives, has prompted some european union member states to introduce new discrimination legislation or watch as the profile of existing legislation rises in line with a new europe-wide awareness. Caroline Stroud, partner at Freshfields Bruckhaus Deringer, examines the current situation in three of the UK’s closest neighbours: France, Germany and Spain?

FRANCE
Forty-six per cent of all workplace claims in France are linked to discrimination – perhaps because of its extensive list of prohibited grounds: origin, gender, lifestyle, sexual orientation, age, family circumstances, genetic characteristics, actual or alleged belonging to an ethnic minority, nationality or race, political opinions, trade union or friendly society activities, religious beliefs, pregnancy, physical appearance, name, health and disability are all protected. Of these, discrimination based on trade union activities has caused the greatest concern in recent years. A 30 year statute of limitations exacerbates the problem, rendering the burden of proof very steep and exposing companies to the risk of high damages.

Gender equality is a hot topic, following government promises to introduce gender quotas for board members and the recent passing of a new policy aimed at closing the gender pay gap by December 2010. Unlike in the UK, the concept of equal pay for equal work also permits a claim that is not linked to sex discrimination. However, although discrimination and equal pay for equal work claims are expected to increase, neither the number of claims nor the levels of compensation are expected to match the UK. A further area of concern is the trend to attach moral harassment to another claim – because compensation for moral harassment is unlimited. (Broadly speaking, moral harassment is bullying suffered by someone regardless of gender, race or age etc.)

GERMANY
Following the implementation on 18 August 2006 of a new general equality act – the Allgemeines Gleichbehandlungsgesetz (AGG) – for the first time Germany has a comprehensive anti-discrimination regime, prohibiting direct and indirect discrimination on grounds of race, ethnicity, gender, religion or belief, disability, sexual orientation and age at all stages of the employment process. Implementing four EU directives, the AGG imposes new obligations and liabilities on employers. The AGG poses problems; in particular, from a provision that termination procedures will be subject to pre-existing rules in other legislation, and not to the AGG itself. Age discrimination is expected to run into particular problems: the anti-age discrimination provisions in the AGG conflict with the as-yet unamended act on protection against dismissal. The latter act requires that age and years of service be taken into account when making selections in a mass redundancy situation.

This obviously risks breaching the AGG. Such inconsistencies are expected to result in cases being brought before the labour courts as employers and employees debate how far the anti-discrimination rules influence termination practice. As in the UK, age discrimination is one of the most alarming problems for employers in Germany. Adapting to the AGG’s anti-age discrimination provisions will require a huge cultural shift in Germany, which has historically favoured its older workers, especially in terms of redundancy and retirement benefits.

The AGG also has financial implications for employers. Labour costs could rise significantly if employers level up to provide younger employees with the same benefits as older employees. The cost of compensating discriminated employees is also expected to rise, as they can now seek compensation for pain and suffering as well as loss of income. In certain circumstances both can be unlimited, emphasising the need for employers to conduct a thorough review of their organisation in light of the new rules and to ensure that staff are trained on its implications. Finally, an even greater risk is that of employers being ordered by the courts to pay claimants the salary they would have received had they been appointed, rather than passed over for discriminatory reasons, in hiring or promotion scenarios.

SPAIN
Like the UK, Spain has had anti-discrimination legislation for many years. The prohibited grounds are birth, racial or ethnic origin, sex, civil status, age (within limits set out by law), social condition, religion or convictions, political ideas, sexual orientation, membership of a union, family ties with other employees, language (in relation to Spain’s official languages) and disability (provided that the person is able to do the job). Age discrimination, introduced in 2003, is the most recent addition. Compensation is unlimited but the award varies depending on the circumstances and the judge. The court can also make a declaration that the dismissal is null and void. Civil penalties, in the form of fines, may also be applicable. So far, they have ranged from £3,005.07 to £90,151.82 but are expected to increase significantly.

As in the UK, retirement is one of the biggest age discrimination concerns in Spain. Although the “right” to retire exists, it is not an obligation and there have been cases successfully brought against employers, on the grounds of moral harassment and age discrimination, based on ‘degrading treatment’ relating to the handling of retirement. As with France, such moral harassment claims piggybacked on other claims are causing considerable concern because they are becoming a common bargaining tool for employees looking to force their employers into a settlement. Compensation for a successful moral harassment claim is unlimited.
Finally, a fast-approaching future concern surrounds the increased litigation expected to result when employees use a new law on the equal treatment of men and women (due for introduction next year) to challenge Spain’s gender pay difference (currently at 30%).