Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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New Obligations for Companies under the Supply Chain Due Diligence Act

New Legislation Enacted

Author: Dr. Sabine Vianden, Associate – vangard | Littler

On January 1, 2023, the Supply Chain Due Diligence Act (LkSG) has come into force in Germany. It initially applies only to companies with at least 3,000 employees. From 2024, the scope of application will expand to companies with 1,000 or more employees. The law obligates companies to establish mechanisms to identify human rights and environmental violations.

Comprehensive risk analyses must be conducted and risk management systems must be introduced or supplemented to discover potential violations. Furthermore, the law requires companies to create a policy statement on the company's strategy, which specifies in more detail the steps the company is taking to comply with its obligations under this law. If the risk systems give cause for concern, the companies must take preventive measures as well as remedial action. Complaint procedures must also be established for those affected by violations. Moreover, as part of a comprehensive documentation and reporting obligation, annual business reports on the fulfillment of obligations must be published and sent to the relevant authorities.

German Federal Labor Court on Equal Pay: Negotiating Skills are No Justification for Unequal Pay

Precedential Decision by Judiciary or Regulatory Agency

Author: Dr. Sabine Vianden, Associate – vangard | Littler

On February 16, 2023 (8 AZR 450/21), the German Federal Labor Court (Bundesarbeitsgericht – BAG) decided that employers may not justify unequal remuneration of male and female employees on the basis that their male employees had better negotiation skills. The court found that unequal remuneration of equal work or work of equal value gives rise to a presumption of gender discrimination. The female plaintiff was granted an "upward adjustment" resulting in a claim to receive the same remuneration as her male co-worker as well as for damages.

While indirect pay discrimination is generally prohibited under German law, pay discrimination may be justified if the employer has a legitimate purpose and the means of achieving this objective are appropriate and necessary. In particular, criteria related to the labor market, performance and work results can justify a difference in pay, provided the principle of proportionality is observed.

Surcharges for Night Work May Vary in Amount

Precedential Decision by Judiciary or Regulatory Agency

Author: Kim Kleinert, Associate – vangard | Littler

In the dispute over surcharges for night work in the German food industry, which has been raging for years, a first leading ruling has been made. On February 22, 2023 (10 AZR 332/20), the Federal Labor Court ruled irregular night work may be paid at a higher wage than regular night work.

Collective agreements may provide for higher surcharges for irregular night work than for regular night work. This provision does not necessarily violate the principle of equality under Article 3 (1) of the German Constitution. However, there must be an objective reason for the unequal treatment and the reason must be made evident in the collective agreement. The Federal Labor Court has ruled in this regard, stating that objective reasons may include the additional burdens of night work or the fact that it is more difficult to plan such work assignments.