Germany: Exclusion Of Fixed-Term Employees From A Remuneration Supplementation Violates EU Law

Last Updated: 5 September 2019
Article by Kerstin Deiters, LL.M., EMBA
Most Read Contributor in Germany, November 2019

The prohibition of discrimination against fixed-term employees has already been the subject of a large number of decisions by both the ECJ and the BAG [German Federal Labor Court]. According to these decisions, fixed-term workers may not receive poorer terms of employment compared to comparable permanent employees simply because of their fixed-term employment status. Rather, such would require substantive justification. In practice, the question as to whether comparability between permanent and fixed-term employees exists in individual cases and/or whether the unequal treatment in question is objectively justified, however, still raises considerable potential for conflict. This was also the case in the last ECJ ruling, in which the Court had to deal with the different treatment of temporary and permanent employees in public administration.

In its ruling, the ECJ clearly stated that merely the civil servant status of permanent employees can not justify the refusal to pay a remuneration supplement based on length of service to temporary contract workers (ECJ, judgment of June 20, 2019 - C-72/18).

The plaintiff had been employed as a teacher by the Ministry of Education of the Government of Navarre since September 2007, which was the defendant before Administrative Court No. 1 of Pamplona in Spain, on the basis of a temporary public service contract and had worked in several educational institutions. Despite having reached the required length of service, the Ministry of Education denied the plaintiff the retroactive payment of remuneration supplements in 2016 on the grounds that the applicant could not claim such a remuneration supplementation because of his lack of civil servant status. The Ministry pointed out that, because of the nature of the civil servants' career, the relevant national legislation implied that the incremental remuneration supplement was part of the personal remuneration of civil servants and therefore (exclusively) inherent in the civil servant status. Specifically, according to the defendant Ministry of Education, the remuneration supplement was intended to remunerate the progressive development of the civil servant in their career. Contract staff, on the other hand, could not move up to salary scale. The civil servant status therefore constitutes a personal condition for granting of the remuneration supplementation, which is added to the objective condition of obtaining a certain seniority.

However, the referring Administrative Court had doubts as to the existence of a substantive ground justifying the different treatment of fixed-term teachers compared to their permanent colleagues in civil service. In particular, it was not clear that there were differences between the tasks, services and professional duties of the civil servant teachers in comparison with the fixed-term contract employees.

The ECJ shares these concerns and answers the question submitted by the Administrative Court by stating that neither the temporary nature nor the (missing) civil servant status of the temporary contract employee constituted appropriate differentiation criterion for the refusal of the remuneration supplement in question, and national legislation (solely) based on those criteria was incompatible with Sec. 4 para. 1 of the Framework Agreement on Fixed-Term Work of 18 March 1999 (in the following: the 'Framework Agreement').

In so far as the defendant Ministry claimed that the plaintiff's differing treatment was not covered by the discrimination prohibition under the Framework Agreement, as the right to the remuneration supplement in question did not depend on the duration of the employment relationship, but rather on whether it was of a statutory or contractual nature, which was why permanent teaching employees under private law contracts also received no remuneration supplement, the ECJ was unable to agree with this view.

The ECJ clarifies that fixed-term employees can successfully invoke Sec. 4 Framework Agreement if they are treated worse than permanent employees who are in a comparable position. On the contrary, according to the ECJ, it would not be necessary for the contract employees concerned to be treated worse in comparison with all categories of permanent workers. In that respect, comparability could well exist between (permanent) civil servants and (temporary) contract employees in the administration.

To this end, in the overall view of the factors, such as the nature of the work, the requirements for training and the working conditions, it is to be examined whether the situation of these occupational groups is comparable. In view of the fact that, like the referring court, the ECJ could not derive any differences with regard to these factors from the submissions of the parties in this case, the ECJ reached the (provisional) conclusion that comparability between civil servants and contract employees in the administration was to be assumed.

Also, a substantive ground which would have been suitable to justify the unequal treatment of the two comparison groups, was not apparent in the opinion of the ECJ. The ECJ refers in this context to its settled case-law, according to which the difference in treatment observed must be justified by the existence of specific circumstances. It would be necessary to examine whether the difference in treatment corresponds to a real need in relation to the employment condition in question in its specific context and on the basis of objective and comprehensible criteria, and whether it is appropriate and necessary for the attainment of the desired objective. This could, for example, arise from the particular nature of the task, where temporary contracts were concluded for the performance of which or, for example, the pursuit of a socio-politically legitimate objective of the Member States (judgments of September 13, 2007 - C-307/05, December 22, 2010 - C-444/09 and of June 5, 2018 - C-547/16). On the basis of those criteria, the general, abstract condition that an employee must be a civil servant to obtain a benefit does not satisfy the requirements for a justification of the difference in treatment (judgment of September 8, 2011 - C177/10).

Here, the ECJ concedes that the Member States are entitled to regulate the conditions for joining the professional civil service and its conditions of employment, in the exercise of their discretion in the organization of their public administration, without breaching Directive 1999/70 or the Framework Agreement. The ECJ emphasizes, however, that the need for unequal treatment of civil servants and contract workers must arise as a result of significant characteristics rooted in the civil servant status. It was therefore necessary that the inherent characteristics of the status of civil servant were decisive for the granting of the advantage. Such a connection was not apparent in the present case.

On the contrary, the remuneration supplement was granted on the basis of reaching a certain length of service and was therefore not bound by promotion to a higher position, so that there was no difference to a mere length of service bonus. The remuneration supplement could therefore not just be described as inherent in the civil servant status. In addition, the calculation of the length of service would take full account of the civil service activities performed by a contract agent under fixed-term public service contracts. Therefore, the remuneration supplement did not affect the specific nature of the type of duties, which may be exercised by civil servants, but not by contract workers.

According to the ECJ, it was therefore the task of the referring court to re-examine whether further circumstances, taking into account the criteria set out, are suitable to preclude comparability between the two categories of workers or to justify a difference in treatment. In any event, the aspects put forward did not suffice for refusal of the remuneration supplement to the temporary contract workers.

Practical notes

The judgment of the ECJ consistently pursues the line of previous case law prohibiting discrimination against fixed-term employees. Unequal treatment of temporary employees compared to comparable permanent employees always requires justification. The civil servant status of permanent employees does not in itself exclude comparability with fixed-term employees whose activity and qualifications are essentially the same as those of civil servants, nor can it abstractly justify a difference in treatment at the expense of fixed-term contract employees. On the contrary, specific circumstances must arise which are associated with the status of civil servant and from which, in relation to the employment concerned, the necessity arises to limit the treatment in question to civil servants.

The defendant Ministry of Education had not put forward such circumstances in the case underlying the decision of the European Court of Justice. The national legislation at issue suggests that not only was there no difference between the activity of the civil servants and the salaried teachers, but that even the remuneration, with the exception of the length of service remuneration supplement claimed, was identical. Against this background, it seems neither necessary nor advisable to transfer the findings of the ECJ to the employees in public administration in Germany. Here, due to the different remuneration systems for civil servants and salaried employees in the public sector, it appears fair to assume that there is no comparability of employment conditions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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