In its recent decision (ruling of 23 October 2025 – 8 AZR 300/24 –), the German Federal Labour Court strengthened the position of equal pay claimants. According to the press release of the Federal Labour Court, the 8th Division of the Federal Labour Court has massively lowered the requirements for evidence of gender-based pay discrimination within the meaning of section 22 of the German General Equal Treatment Act (AGG) as compared to the ruling of the Regional Labour Court, thus easing the burden of proof for equal pay claimants: If employers are unable to refute the presumption of gender discrimination resulting from a comparison between one male and female employee, they are in principle obliged to pay whatever was paid to the colleague used as the comparator person. According to the Federal Labour Court’s decision, a single comparator person of the other sex performing the same work or work of equal value is sufficient for such a presumption of gender-based discrimination.

Facts

Relying on the principle of equal pay as stipulated under European (primary) law in Art. 157 TFEU and the German Pay Transparency Act (EntgTranspG), the claimant had demanded higher remuneration from her employer retroactively for a total period of five years. The claimant’s individual pay was below the median pay of both the male and female comparator group at the relevant management level. Primarily, she demanded an adjustment of her pay to the pay of a male colleague she named, who was also the globally best-paid male employee within the male comparator group. The claimant had based her claim on a so-called pay transparency dashboard made available on her employer’s intranet, in which employees could compare themselves with all other female and male employees in the relevant comparator group.

Regional Labour Court decision of lower instance: equal pay claim only in the amount of the difference in median pay between the female and male comparator groups

The lower court (Baden-Württemberg Regional Labour Court, decision of 1 October 2024 – 2 Sa 14/24 –) still saw the need for a predominant probability of gender-based discrimination and therefore only awarded the claimant a claim to compensation for the difference in pay with regard to individual remuneration components, amounting to the difference between the median pay of the female and male comparator groups. According to the court, the claimant could not refer to a single comparator person of the other sex (the colleague in the male comparator group with the highest pay entitlement) for the presumption of pay discrimination. In view of the size of the male comparator group and the median pay of both comparable gender groups, there was no prevailing probability of gender-based discrimination and thus no sufficient evidence that would lead to a shift in the burden of proof to the detriment of the employer pursuant to section 22 AGG, the Regional Labour Court stated.

Federal Labour Court: comparison with single comparator person sufficient for a rebuttable presumption

However, according to the recent Federal Labour Court decision, in order for a presumption of gender based pay discrimination to apply – which is to be rebutted by the employer – it is sufficient if the female claimant employee demonstrates and, in the event of a dispute, proves that her employer pays a higher pay to one male colleague who performs the same work or work of equal value. In the opinion of the Federal Labour Court, the size of the male comparator group and the level of the median pay of both gender groups is irrelevant for the presumption to apply. It is sufficient if the claimant presents sufficient facts in relation to one comparator person that give rise to a presumption of gender-based pay discrimination (known as pair comparison). Consequently, the best-paid male colleague within a comparator group could also be used for this purpose.

In the view of the Federal Labour Court, the claimant – by referring to the information on the company’s internal dashboard – presented sufficient facts regarding a comparator person that suggest gender-based pay discrimination. The Federal Labour Court therefore referred the matter back to the court of lower instance and instructed the Regional Labour Court to examine in the further appeal proceedings whether the respondent employer had rebutted this presumption, irrespective of the lack of transparency of their remuneration system, with both parties having to be given the opportunity to supplement their factual submissions.

EU law requirements

According to the press release, the Federal Labour Court based its decision on the requirements of primary EU law. This likely refers to the case law of the ECJ on the so-called “pair comparison” in the Brunnhofer case. According to this ECJ decision, it is for the plaintiff to prove by any form of allowable evidence that the pay she receives from her employer is less than that of her chosen comparator, and that she does the same work or work of equal value, comparable to that performed by the male colleague, so that prima facie she is the victim of discrimination which can be explained only by the difference in gender. According to the ECJ, if the plaintiff in the main proceedings adduced evidence to show that the criteria for establishing the existence of a difference in pay between a woman and a man and for identifying comparable work are satisfied in this case, a prima facie case of discrimination would exist and it would then be for the employer to prove that there was no breach of the principle of equal pay (ECJ, judgment of 26 June 2001 – C-381/99 – Brunnhofer, paras. 58 and 60).

This case law of the ECJ, now taken up by the German Federal Labour Court, will likely in future also form the basis for the interpretation of Art. 18(1) of the Pay Transparency Directive (EU) 2023/790, which must be transposed into national law by 7 June 2026, as well as for its national implementation. According to Art. 18(1) of the Pay Transparency Directive, when workers who consider themselves wronged because the principle of equal pay has not been applied to them establish before a national court facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no direct or indirect discrimination in relation to pay.

However, this raises the question of what significance the information pursuant to Art. 7 of the Pay Transparency Directive still has, according to which employees can request information on their individual pay levels and on the average pay levels of both gender groups in the relevant comparator group. In future, the individual right to information pursuant to sections 10 et seq. of the German Pay Transparency Act (EntgTranspG) cannot be limited to stating the median pay of the other gender but will have to cover the average pay levels of both gender groups in the relevant comparator group in order to comply with the Directive. If the employer does not comply with this obligation to provide the required information, the burden of proof shall also in principle shift to the employer in accordance with Art. 18(2) of the Directive (unless the employer proves that the infringement was manifestly unintentional and of a minor charact), and the employer must then prove that there is no pay discrimination. It remains to be seen whether the German legislator will continue to require the median in addition to the average pay levels of the two gender groups within the comparator group when transposing the Directive.

The Directive further facilitates equal pay claims: for instance, Art. 15 of the Directive provides that associations, organisations, equality bodies and workers’ representatives or other legal entities which have a legitimate interest in ensuring equality between men and women, may engage in any administrative procedure or court proceedings regarding an alleged infringement of the rights or obligations relating to the principle of equal pay and which may act on behalf of, or in support of, a worker who is an alleged victim of an infringement of any right or obligation relating to the principle of equal pay, thus potentially enabling mass claims. Moreover, Art. 22 of the Pay Transparency Directive provides for facilitations regarding the distribution of costs when bringing equal pay claims. Member States must ensure that in cases where an employer respondent is successful in proceedings relating to a pay discrimination claim, national courts can assess, in accordance with national law, whether the unsuccessful claimant had reasonable grounds for bringing the claim and, if so, whether it is appropriate not to require that claimant to pay the costs of the proceedings.

Conclusion and how employers can prepare

With its decision, the Federal Labour Court strengthens the position of equal pay claimants and significantly reduces the requirements for the burden of presentation and proof. The upcoming transposition of the Pay Transparency Directive into national law will further drive the development towards facilitating the enforcement of the equal pay principle.

Employers are strongly advised to document individual pay decisions and their objective, non-gender related reasons (e.g. the particular qualifications of an employee or the particular market conditions that may justify a higher pay) in order to be able to rebut the presumption of gender-based pay discrimination. This becomes increasingly indispensable for salary bands that are frequently used in practice and for individual pay decisions.

In practice, it would also seem advantageous with regard to equal pay claims if the comparator groups that perform the same work or work of equal value (in the language of the Directive “categories of workers”) and into which employees are to be grouped based on the objective gender-neutral criteria referred to in Art. 4(4) of the Directive – i.e. skills, effort, responsibility and working conditions, and, if appropriate, any other factors which are relevant to the specific job or position – are rather small. The case also highlights that it is time to prepare for transparent and well designed gender-neutral pay systems which, taking into account the requirements of the Pay Transparency Directive, make it possible to assess in a comprehensible, gender-neutral manner whether employees are in a comparable situation in terms of the value of their work.