Diversity and inclusion are topics that nowadays play an important role for every
company doing business in Germany. A corporate culture of diversity is key for a
successful company as it not only demonstrates the company’s awareness and
acknowledgement of its social structure but can also strengthen the employees’ sense
of belonging and employee retention. Companies are therefore interested in creating an
environment in which their employees can contribute their skills, talents and experience
and develop their full potential.
As part of HR planning, diversity management measures
are taken to promote the social, cultural and ethnic diversity of employees and to use
it for the benefit of the company. However, when implementing diversity management
strategies and measures, companies must comply with certain rules under German law,
especially from an employment and privacy law perspective. The following 10 pitfalls
should help to navigate through the relevant areas:
Observe the legal
framework
Any topic related to diversity and inclusion,
may it be during the onboarding process
or during the ongoing employment
relationship, needs to especially comply
with (a) the General Equal Treatment Act
(Allgemeines Gleichbehandlungsgesetz –
“AGG”) and (b) the Federal Data Protection
Act (Bundesdatenschutzgesetz – “BDSG”),
accompanied by the EU General Data Protection
Regulation (“GDPR”). The AGG is the central
statute for protection against discrimination
within the workplace. The regulations of BDSG
and GDPR aim to protect any person’s right to
protection of personal data.
In addition to this general legal framework, there
are several more specific regulations that must
be observed in this area. By way of example, in
order to close the gender pay gap, the EU has
passed the so-called Pay Transparency Directive,
which is intended to help women in particular
to better assert their right to equal pay. For
German legislators, this means amending the
Pay Transparency Act (Entgelttransparenzgesetz
– „EntgTranspG“), which has been in force since
2017. The responsible Federal Ministry is working
on a corresponding draft.
As the topic of diversity, equity and inclusion is
becoming more and more important, it is to be
expected that more legislation in this field will be
passed. Observing the most recent developments
is therefore crucial.
Avoid discrimination
under the AGG
Employees, trainees, applicants and former
employees are protected from discrimination
based on certain characteristics (i) during the
application process, (ii) during contract initiation
and recruitment, (iii) during the entire employment
relationship (iv) as well as upon termination of
the employment relationship and beyond. The
characteristics protected under the AGG include:
race or ethnic origin, gender, religion or belief,
disability, age and sexual identity. Due to the
potential claims of employees in the event of a violation (compensation, indemnification, but
no right to employment), any kind of direct and
indirect discrimination should be avoided.
Staff survey on diversity
and inclusion yes, but…
… only voluntary and/or completely anonymous
to be compliant with data protection regulations.
Diversity management measures usually begin
with an assessment of the current situation in the
company. To this end, companies often conduct
surveys that include demographic questions on
diversity of genders, ethnicities and identities,
equality and inclusion. As personal and sensitive
data is collected and processed in this context,
the rules of data protection law in particular
must be observed. It is advisable to conduct
the survey anonymously, if possible, i.e. it must
be ensured that the answers cannot be traced
back to an individual employee in any way as
anonymized data collection does not fall within
the scope of the GDPR or BDSG. When avoiding
possible trace-back one should not only have the
technical but also the factual possibilities in mind.
Not seldomly a conclusion about an employee’s
identity can be drawn from the answers in the
survey themselves, e.g. if the survey includes a
question on ethnicity and an employee is the only
one with Asian background. If it is not possible to
conduct the survey anonymously, the employee’s
prior consent must be obtained as this is the only
legal basis for the collection and processing of
personal data. In general, the scope of the data
and the duration of data storage is permitted
only as long as it is necessary and proportionate
for the predetermined, explicit and legitimate
purpose. Therefore, it is best to keep it limited to
the necessary minimum.
Be careful when
advertising jobs
According to the AGG, job advertisements must
not violate the prohibition of discrimination
and must not contain any requirements that
entail discrimination based on a protected
characteristic. Job advertisements must therefore
not contain any requirements relating to gender,
age or ethnic origin, for example. Above all, they should always be formulated in a gender-neutral
manner, either by using the gender designation
“m/f/diverse” or by using gender-neutral generic
terms (“job in sales”). Unequal treatment can
only be justified under strict conditions, e.g. if the
protected characteristic constitutes a genuine
and determining occupational requirement due
to the nature of the activity to be carried out or
the conditions under which it is carried out.
Employer’s right to ask
questions in job interviews
is limited
As mentioned before, the AGG applies to
applicants as well and therefore must be
observed when conducting a job interview.
“Simply” questioning employees on a personal
level is not recommended as the AGG prohibits
discrimination on the grounds of race, ethnicity,
gender, religion or ideology, disability, age
and sexual identity. The employer should only
ask questions the answers to which are of a
justified interest to the employer concerning the
employment and have a significant factual and
close connection with the position of employment.
The connection must be so close that the
employee’s interest in protecting their personal
rights and the sanctity of their individual sphere is
overruled. Considering these ground rules, German
case law has developed a list of questions which
should not be asked in a job interview as they are
not of justified interest of the employer:
- Pregnancy or family planning
- Disabilities
- Marital status
- Criminal record, unless if relevant for the
advertised position, e.g. as employee with
fiduciary duties
- Financial situation, SCHUFA (credit check),
unless if relevant for the advertised position,
e.g. as bookkeeper
- Religion and/or ideology, unless the employer
is a religious institution
- Political tendency and/or party membership,
unless the employer is a political party or
institution
- Whether someone holds public office,
honorary or elected
- Trade union membership
- Club, association or organization
membership(s)
- Sexual identity and orientation
If a question is not permissible because it
does not fall within the justified interests of
the employer or breaches a prohibition on
discrimination, the candidate may give a false
answer without possible charge being made
against him or her in the future. This is the socalled
“right to lie”.
Note the narrow limits for
background checks
Background checks are permissible only in
exceptional cases as the high standard of privacy
protection under German and European law sets
narrow limits. The employer’s legitimate interest in
gathering personal data must be so great that
the protection of the candidate’s data rights is in
comparison less important. As a rule, the employer
is required to obtain any information relevant to
the selection process directly from the candidate.
Moreover, inquiries made by the employer are
legitimate and permissible only if the information
is necessary for the employer to assess whether
the candidate is capable of properly performing
the duties of the position in question.
Protection of vulnerable
groups of employees
7
8 Whether someone holds public office,
honorary or elected
Trade union membership
Club, association or organization
membership(s)
Sexual identity and orientation
If a question is not permissible because it
does not fall within the justified interests of
the employer or breaches a prohibition on
discrimination, the candidate may give a false
answer without possible charge being made
against him or her in the future. This is the socalled
“right to lie”.
Note the narrow limits for
background checks
Background checks are permissible only in
exceptional cases as the high standard of privacy
protection under German and European law sets
narrow limits. The employer’s legitimate interest in
gathering personal data must be so great that
the protection of the candidate’s data rights is in
comparison less important. As a rule, the employer
is required to obtain any information relevant to
the selection process directly from the candidate.
Moreover, inquiries made by the employer are
legitimate and permissible only if the information
is necessary for the employer to assess whether
the candidate is capable of properly performing
the duties of the position in question.
Protection of vulnerable
groups of employees
Certain employee groups that are considered
vulnerable under German labor law enjoy special
protection. This includes in particular severely
disabled employees, pregnant employees
and new mothers, new parents as well as
employees caring for relatives. Employees within
these groups enjoy special protection against
dismissal as the prior approval of the respective
state authority is required. The individual
groups furthermore have different additional
entitlements, for example in terms of adaptation
of the workplace according to personal
circumstances and/or paid time off.
Affirmative action
measures
German law does not obligate the German
employer to take affirmative action, but rather
only sets ground rules under which such measures
are permissible. This is the case if suitable and
appropriate measures are taken to prevent
or compensate for existing disadvantages
on the grounds listed in sec. 1 AGG. Purpose
of this provision is to enable the promotion of
disadvantaged groups. Examples of permissible
measures include: targets for a mixed workforce
composition, plans for the advancement
of women, integration agreements for the
disabled or programs to promote training for
disadvantaged young people.
The general principle on affirmative action
measures under this provision is that the
promotional measure is only permissible under
the following conditions:
(i) current or future existence of a disadvantage
i.e. any reduction in opportunities or any increase
in burdens that people experience solely
because of the protected characteristics, (ii) the
positive action measure must have the direct aim
of compensating for the unequal treatment; be
suitable for achieving this aim; there must be no
equal or equally effective measure that is less
disadvantageous to the non-promoted group.
According to these principles it is not surprising
that one will not find many quotas in German
statutory law. In fact, the European Court of
Justice (“CJEU”) has ruled rigid quotas that grant
absolute and undifferentiated priority to one
group of people as impermissible as they are
considered mere measures to achieve equality
of results rather than measures to promote equal
opportunities.
The only quota is stipulated in sec. 154 of
the German Social Security Code Part IX
(Sozialgesetzbuch IX – “SGB IX”). According to
this provision, employers with an annual average
of at least 20 employees per month must employ
at least 5% severely disabled people. If unable,
the employer must pay a monthly so-called
compensatory contribution (Ausgleichsabgabe)
per unoccupied position that the employer is
obliged to fill in with a severely disabled person.
The amount of the contribution ranges from EUR 140.00-720.00 per unoccupied position
depending on how many positions are filled
in accordingly and how many the employer is
obliged to fill in.
Involving the works council
If a works council exists, one should always
keep an eye on possible information and codetermination
rights when carrying out diversity
management measures. A co-determination
right can arise particularly regarding “diversity
monitoring” measures like employee surveys
as such often go hand in hand with technical
equipment designed to monitor employees
within the meaning of the Works Constitution
Act (Betriesbverfassungsgesetz – “BetrVG”).
The works council also has the right to demand
measures to promote equal opportunities and
diversity management. Works agreements with
the employer can include, for example, the
integration of people with disabilities or the
advancement of women. Strategic cooperation
with the works council also makes sense, as
involving the works council promotes acceptance
of the measures within the workforce.
Preventing consequences
of a (presumable)
discrimination
Besides, of course, the damage to the employer’s
public image, from a strict legal point of view,
a discriminated employee or applicant may
claim damages under the AGG, may it be due
to an impermissible question asked or other
discriminatory measures. Employees even enjoy
a facilitation of proof as they only must prove
circumstantial evidence that there is causality
between a less favorable treatment and one of
the characteristics in sec. 1 AGG.
However, they still bear full burden of proof
regarding causality between the less favorable
treatment and a damage. Hence, they must
proof that a non-discriminatory treatment would
have resulted in a different outcome which is
often difficult. And even if they were able to
obtain such proof, the amount of damage
compensation is left to the discretion of the
courts which are rather reserved. Damage
compensation sums in a high five-figure range
are rather rare and only awarded in exceptional
cases (note: damages claimed by applicants for
not being hired due to discrimination are even
capped by law to three monthly salaries).
Key is that there is proper documentation of
decisions (e.g. promotion, incentives, roles etc.)
and an adequate level of covering the business’
decision in general exists. This increases as soon
as one has the feeling that something is about to
go sideways.
Download pdf: 10 pitfalls when dealing with diversity and inclusion under German law
