Top earners can be used for equal pay claims, German court rules

The country’s Bundesarbeitsgericht – (BAG, the Federal Labour Court) – overturned a previous ruling after a female department head at Daimler Trucks had sued for equal compensation, after finding out she earned significantly less than a male counterpart performing similar work.

The state labour court for Baden-Württemberg had awarded the woman around €130,000, basing the compensation on the median salary of male department heads, but rejected her claim to match the top earner.

The federal court overturned that decision, clarifying that while median salary data may be relevant under the German Pay Transparency Act, it does not preclude the use of a higher-earning individual comparator. In this case, the existence of a significantly better-paid male colleague was sufficient to establish a presumption of gender-based pay discrimination, shifting the burden of proof to the employer to justify the disparity with objective, non-discriminatory reasons.

While the ruling may open the door for similar claims, German employment rules still limit the information available about colleagues renumeration.

Employment law expert Manfred Schmid of Pinsent Masons said: “Despite the ruling, employees still have no legal right to know a colleague’s exact salary, as the German Pay Transparency Act only grants access to median values.”

“The EU Pay Transparency Directive (2023/970) is due to be implemented by June 2026 and will expand access to that data, especially for smaller companies, but will still limit it to aggregated figures.”  

The BAG ordered that he hearing be sent back to the state level court, where Daimler Trucks would have another chance to present its reasons for the salary discrimination. The woman in question may also submit further evidence at the same hearing.

Felix Pickert, a specialist in employment law with Pinsent Masons, warned employers in the country would need to take note of the court’s findings and the implications they had for fair pay ahead of next summer.

“The Federal Labour Court reaffirmed its commitment to enforcing equal pay and clarified that women are not limited to comparing themselves to average earners,” he said.

“Employers must work to ensure their compensation systems are transparent, objective, and gender-neutral; ideally well before the EU directive takes effect in June.”