Dyrektywa UE nr 2023/970 w kwestii wzmocnienia stosowania zasady równości wynagrodzeń i mechanizmów egzekwowania prawa oraz wyzwania
związane z jej wdrożeniem do porządku prawnego Republiki Słowackiej
Dyrektywa 2023/970 w sprawie wzmocnienia stosowania zasady równości wynagrodzeń dla mężczyzn i kobiet za taką samą pracę lub pracę o takiej samej wartości za pośrednictwem mechanizmów przejrzystości wynagrodzeń oraz mechanizmów egzekwowania stanowi ważny krok Unii Europejskiej w kierunku równego wynagradzania kobiet i mężczyzn za taką samą pracę. Ma ona na celu zaradzenie utrzymującym się różnicom w wynagrodzeniach kobiet i mężczyzn, wprowadzenie obowiązku zgłaszania różnic w ich wynagrodzeniach przez pracodawców, jak również wzmocnienie narzędzi prawnych do zwalczania dyskryminacji. Wdrożenie tej dyrektywy w Republice Słowackiej wymaga zmian w kilku regulacjach prawnych, a także przestrzegania kryteriów administracyjnych i finansowych, zwłaszcza przez duże firmy. Pomyślne wdrożenie omawianej dyrektywy może poprawić warunki pracy i równość wynagrodzeń, wspierając rozwój społeczny i gospodarczy.
Słowa kluczowe: równość wynagrodzeń, różnice w traktowaniu kobiet i mężczyzn, dyskryminacja, przejrzyste warunki pracy, wynagrodzenie, transpozycja
Abstract
On the EU Directive no. 2023/970 on the transparency of remuneration and enforcement mechanisms and its implementation challenges
into the legal order of the Slovak Republic
Directive 2023/970 to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms, represents an important step of the European Union toward equal pay for men and women for equal work. It aims to address the persistent gender pay gap, introduce gender gap reporting obligations for employers, and strengthen legal tools to combat discrimination. Implementing this Directive in the Slovak Republic will require amendments to several legal regulations and bring administrative and financial demands, especially for large companies. Successful implementation can improve working conditions and equal pay, supporting social and economic development.
Keywords: equal pay, gender differences, discrimination, transparent working conditions, remuneration, transposition
1. Introduction
Equal pay means that employees[1] should receive equal pay for equal work or work of equal value, measured by objective criteria such as skill and responsibility, not by gender, age or other personal characteristics. This principle is the basis of social justice and the fight against discrimination. Ensuring equal pay increases productivity and economic growth and reduces the risk of poverty, especially for women. The right to equal pay is enshrined in international, European and national legislation, most recently supplemented by Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms (hereinafter referred to as “Directive 2023/970”), and which reflects ongoing efforts to fulfil these obligations and strengthen the legal framework to ensure equal treatment in the workplace.
2. Historical and legislative context
Equality between women and men is one of the fundamental values and goals of the EU,[2] and it must be ensured in all areas, including employment and remuneration.[3] Discrimination based on gender is prohibited.[4] The development of equal pay legislation in the EU began in the 1950s and includes several necessary steps and directives. The principle of equal pay for men and women was first enshrined in the EEC Treaty in 1957. Council Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women[5] imposed an obligation on member states to ensure the practical application of this principle. Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions extended equal treatment to access to employment and working conditions,[6] which strengthened women’s rights and introduced protection against discrimination.
Directive 2002/73/EC of the European Parliament and of the Council of 23 September 2002 amending Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions[7] revised and expanded protection against discrimination, whereas Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation unified previous legal acts regarding equal opportunities and treatment. Directive (EU) 2019/1158 of the European Parliament and of the Council of 20 June 2019 on work-life balance for parents and carers and repealing Council Directive 2010/18/EU[8] contributed to improving conditions for parents of both sexes, thus indirectly supporting equality in remuneration.
The development of legislation on equal pay clearly shows the gradual strengthening of the legal framework to support equality between men and women in working life. Despite these measures, significant differences in pay persist – in 2022, the average gender gap was 12.7% in the EU and 17.7% in Slovakia.[9] These inequalities are influenced by women being more likely to work part-time and in lower-paid industries.
The second problem is the lack of transparency in remuneration. Employees often do not know how their compensation is determined compared to their peers, making it challenging to identify discriminatory practices. The lack of transparency creates the need to introduce mechanisms for fair remuneration.
The third reason for adopting Directive 2023/970 is the weak enforcement of existing legislation. Sanctions for violations of equal pay rules were often insufficient, and victims of discrimination faced difficulties in proving their rights. Last but not least, there are significant differences in the approach to equal pay between Member States, which has led to an uneven application of this principle. Harmonisation of rules within the EU is, therefore, essential.
Equal remuneration not only contributes to fairness and equal opportunities for all employees but also improves the use of human resources and increases productivity and competitiveness. Adopting Directive 2023/970 also reflects the EU’s obligations towards international standards, such as the ILO Convention No. 100. It is intended to strengthen the EU’s reputation as a leader in human rights and gender equality.
The new Directive aims to tackle persistent problems such as the gender pay gap, lack of transparency and weak legislation enforcement. It aims to harmonise rules within the EU, ensure consistent application of the principle of equal pay and promote equality in the labour market. Implementing strict rules on equal pay will contribute to a fairer society and strengthen the EU’s position as a global leader in human rights and gender equality.
This legal framework supports the fight against discrimination and ensures better working conditions and equal opportunities for both men and women. The development of legislation thus testifies to the EU’s long-term efforts to achieve equality in employment and remuneration, which is crucial for building a fairer and more sustainable society.
3. Presentation of Directive 2023/970
Following the jurisprudence of the Court of Justice of the EU,[10] the introduction of Directive 2023/970 explains the key concepts, the inconsistent application of which is considered an obstacle to enforcing the right to equal pay. The Directive applies to all employees who have an employment contract or are in an employment relationship under the law, collective agreements and common practice of individual member states. Domestic workers, on-call workers, platform workers, interns and apprentices can be considered employees. Determining whether an employment relationship exists is based on the facts of work performance, not on describing the relationship between the parties.
The term “remuneration” includes salary and other monetary and in-kind benefits, such as bonuses, overtime compensation, travel benefits, housing allowance, sickness benefits, statutory compensation and pension insurance. Directive 2023/970 introduces a new concept of cross-cutting discrimination, which consists of discrimination based on a combination of gender and other grounds such as racial origin, religion, disability or age. This concept allows courts and competent authorities to assess better disadvantages arising from multiple reasons simultaneously.
The Directive obliges Member States to ensure that employers put in place pay structures that guarantee equal pay for women and men for equal work or work of equal value. Comparing the value of work should be based on objective criteria such as education, expertise, skills, effort, responsibility and working conditions. These criteria must be gender-neutral and applied to employees regardless of gender. At the same time, they must agree with employee representatives and be applied without direct or indirect discrimination.
Employers must ensure that the evaluation of employees also includes so-called soft skills such as empathy and interpersonal communication and that these are not undervalued. When assessing whether employees are in a comparable situation, the Directive enables comparisons between employees working for the same employer and between employees whose remuneration is determined by a single source, for example, a collective agreement. In the absence of an actual comparator, the Directive allows comparison with a hypothetical comparator or the use of statistical evidence.
The Directive responds to the problem that women often do not have access to information about the remuneration of their male colleagues. It, therefore, introduces measures to ensure the transparency of remuneration. Employers must state the starting pay level in job advertisements or before a job interview and not ask applicants about their previous salaries. Employees have the right to request information about their remuneration and about average remuneration by gender for employees in the same positions.
For larger employers with 100 or more employees, the Directive introduces the obligation to submit reports on the gender pay gap regularly. These reports must include data on base pay, variable pay components and the median gender pay gap. The obligation to carry out these reports will take effect gradually, with employers with 250 or more employees having to start from 2027 and smaller employers from 2031.
In cases where a difference in remuneration greater than 5% is found without objective justification, the employer must conduct a joint assessment of remuneration with employee representatives. If these differences cannot be justified, the employer must take corrective measures to eliminate the discrimination.
The Directive contains measures to ensure access to justice for victims of discrimination. Employees may seek damages, including recovery of unpaid wages, compensation for lost opportunities and non-pecuniary damages. If the employer fails to fulfil the obligations of transparency, the burden of proof is transferred to the employer, who must prove that there was no discrimination.
Monitoring the implementation of the Directive will be ensured by a specialised monitoring entity that will collect data on discrimination and publish reports on pay inequalities. This body may be part of existing institutions such as labour inspectorates or equal treatment bodies, and its role will be to aggregate data, analyse the causes of pay gaps and provide tools to address them.
Based on data from monitoring entities, member states must take measures to eliminate detected inequalities and ensure fairness in remuneration. The monitoring entity will also be obliged to submit annual reports to the Commission on cases of discrimination in remuneration that a court or competent authority has submitted.
The Directive further introduces strict sanctions for violating the principle of equal pay. Member States must ensure that employers face adequate fines and other sanctions, such as exclusion from access to public funds or other financial incentives. Repeated violations may lead to the application of even more severe sanctions.
The Directive also protects employees from retaliation by employers when they file a discrimination complaint. Employers must ensure that no employee is dismissed or otherwise disadvantaged for exercising their rights under the Directive. Entities for equal treatment, labour inspectorates and other relevant authorities will work closely together to supervise compliance with these rules and ensure the protection of employees.
This legal framework aims not only to improve transparency and equality in pay but also to empower victims of discrimination and ensure that the pay gap between men and women is gradually reduced. The Directive thus contributes to the broader goal of ensuring fairness in the European labour market and protecting the fundamental rights of all employees.
4. Challenges to the implementation of Directive 2023/970
into the law of the Slovak Republic
Directive 2023/970 represents an important step in the fight against the gender pay gap and improving working conditions in the EU. It strengthens legal frameworks and introduces new mechanisms to ensure equal pay for men and women. The success of its implementation depends on its incorporation into national legal systems. The Ministry of Labour, Social Affairs and Family of the Slovak Republic plans to create a working group composed of experts, employers and trade unions to ensure compliance with these principles.[11]
Slovak legislation already contains several mechanisms for protection against discrimination, such as the Act No. 365/2004 Coll. on equal treatment in certain areas and protection against discrimination and amendments to specific laws (Anti-Discrimination Act) as amended (hereinafter referred to as the “Anti-Discrimination Act”) and the with Act no. 160/2015 Coll. Code of Civil Procedure as amended (hereinafter referred to as “Code of Civil Procedure”) allows the filing of lawsuits with a transferred burden of proof. However, the new institute of cross-sectional discrimination is missing in the current legislation, and its implementation will require an amendment. The definition of “equal work” or “work of equal value” already exists in the Labour Code, according to which equal work is assessed based on complexity, responsibility and effort. Implementing the Directive will require harmonisation of job evaluation criteria, such as education and professional training, which is not yet included in the Slovak regulation.
The new institution of cross-sectional discrimination is currently not regulated in the anti-discrimination legislation concerning any reason or area. The transposition will require an amendment to the Anti-Discrimination Act, which will require the legislator to be careful, as the current foreign application practice shows doubts related to its application in practice.[12]
§ 120 of the Labour Code determines the minimum wage requirements for employees based on the degree of work difficulty, regardless of gender. However, the Directive requires a broader framework of job evaluation criteria, which means that the Slovak Republic will have to assess to what extent the current legislation is effective and whether it is necessary to introduce new instruments. Public administration requires special attention, where ensuring uniform classification of employees into salary classes is necessary.
When it comes to comparing the value of work in the case of employees, in which the remuneration conditions can be attributed to a single source, in the conditions of the Slovak Republic, it is necessary to pay particular attention to the state and public administration and ensure a uniform method of classifying employees into the relevant salary classes, even across regions.
The possibility of comparing employees with hypothetical comparison persons[13] is not regulated in the Slovak Republic. It is a potential innovation that will make it possible to compare employees in the same sector or similar positions, even if they do not work for the same employer. At the same time, if the employer applies a work evaluation system, the Slovak legislation is already in line with the Directive’s requirements that such criteria be gender-neutral.
Current Slovak legislation already requires employers to indicate the starting salary in job advertisements,[14] which aligns with the Directive, but this obligation only applies to the primary salary component. However, the Directive broadly defines remuneration, including other monetary or material benefits. Asking the employer about the remuneration of the job seeker in previous employment relationships in the Slovak Republic is not among the information explicitly listed as that which the employer is forbidden to demand. However, it is impossible to demand it as it is not among the information related to the work the person is supposed to do.[15] Nevertheless, the legislator could supplement the provision of § 41 par. 6 of the Labour Code and § 62 par. 3 of the Act no. 5/2004 Coll. on Employment Services, as amended, also for this prohibition.
The implementation of the Directive will require adjustments at several levels. Employers must review their remuneration structures and ensure that remuneration criteria are objective and gender-neutral. The introduction of the obligation to provide employees with information on remuneration by gender for the same work or work of equal value in the Slovak Republic does not pose a problem because employers already have this information available.
As regards the right of employees to information, currently, the right of employees to request information on average remuneration levels broken down by gender for categories of employees performing the same work or work of equal value is not regulated in any way. However, the future adjustment does not appear to be problematic, as employers should already have this information at their disposal, and their obligation will arise only based on an individual request of the employee to provide it. For the transposition, however, it will be necessary to adjust the competencies of employee representatives and the Slovak National Centre for Human Rights.
The Slovak Republic’s Labour Code already prohibits confidentiality clauses regarding wage conditions. However, the Slovak Republic will have to adopt new measures to report gender differences in remuneration, as such obligations have not yet been established. Existing statistical reports can be used to collect this data.
The Directive introduces the obligation to conduct a joint assessment of remuneration if a difference of at least 5% in the remuneration of men and women is found in the organisation without objective justification. In the Slovak Republic, such an assessment is not yet mandatory, which will require adjustments in the obligations of employers and the competencies of labour inspectorates and the Slovak National Centre for Human Rights. Attention will also need to be paid to the fact that not all employers in the Slovak Republic have employee representatives. In such cases, employers must designate one or more employees for this article.
The current Slovak legislation already allows victims of discrimination to claim their rights in court.[16] The Code of Civil Procedure allows another entity to join the proceedings,[17] including the Slovak National Centre for Human Rights,[18] which can represent employees. However, it will be necessary to adjust the legal subjectivity of employee councils and enable the Slovak National Centre for Human Rights to represent several employees simultaneously.
Concerning limitation periods, the general legal regulation according to the Civil Code[19] currently applies to the application of claims, i.e. the limitation period is three years and runs from the day when the right could be exercised for the first time, which may be before the end of the violation of the equal pay principle. When it comes to costs, the procedural principle enshrined in the Code of Civil Procedure applies, according to which the court awards compensation to the parties according to the ratio of their success in the matter, which also applies in the case of anti-discrimination disputes.
As for sanctions, Slovak labour law provides fines for non-compliance with the principle of equal pay, with a maximum fine of 100,000 euros.[20] Unlike the Directive, however, there are no minimum fines nor consideration of the duration of the violation or the employer’s intention. The implementation of the Directive also will require the introduction of minimum sanctions and special penalties for repeated violations.[21]
Protection against retaliatory measures by employers is already regulated in the Labour Code. On the other hand, the Slovak Republic will have to create a specialised monitoring entity responsible for monitoring the implementation of the Directive, collecting data and monitoring differences in remuneration. This entity will have significant competencies, and its establishment will require financial costs for the state.
The implementation of Directive 2023/970 will thus require several legislative changes and the introduction of new tools that will strengthen the rights of employees, increase the transparency of remuneration and reduce gender differences in remuneration in the workplace. If these goals are effectively met, the Directive could significantly contribute to greater equality in the labour market in the Slovak Republic.
5. Conclusion
By adopting Directive 2023/970 on pay transparency, the EU has taken steps towards achieving equal pay for men and women for equal work or work of equal value. The Directive follows on from years of legislative efforts and reflects ongoing problems in gender pay gaps. It aims to tackle critical issues such as the persistent pay gap, lack of transparency and weak enforcement of existing legislation. By introducing mechanisms such as a shifted burden of proof and the obligation for employers to report on gender pay gaps regularly, the Directive strengthens the legal tools to fight discrimination. Directive 2023/970 also strengthens the legal status of victims of discrimination and guarantees access to legal proceedings and protection against retaliation by employers. The introduction of effective sanctions for violations of rights related to equal pay strengthens its effectiveness and enforceability.
Implementing the Directive into the Slovak legal system is a complex and demanding task that requires careful consideration and modification of existing legislation. Implementation will require the amendment of several legal regulations, namely the Labour Code, the Anti-Discrimination Act, the Act on the Establishment of the Slovak National Centre for Human Rights, the Code of Civil Procedure, and the Act on Labour Inspection. Although the Slovak legal system already contains some mechanisms to combat discrimination and ensure equal remuneration, critical aspects of the Directive, such as remuneration transparency, access to information on remuneration and the introduction of objective career advancement criteria, will have their premiere in Slovak legislation. It will be equally important to strengthen the powers and competencies of the labour inspectorate and the Slovak National Center for Human Rights to effectively control compliance with the new rules and punish potential violations. Establishing minimum amounts of fines and specific sanctions for repeated violations should serve as a prevention against non-compliance with the principles of equal remuneration.
The Directive brings more administrative and financially demanding obligations, especially for employers with over 250 employees. At the same time, it does not regulate how to calculate this number of employees at one employer. Therefore, whether this number includes only employees in an employment relationship or employees performing work based on one of the work agreements performed outside of an employment relationship is unknown. Mandatory reporting on the difference in the remuneration of female and male employees would represent a disproportionate financial and administrative burden for small and medium-sized enterprises; therefore, it will be necessary to introduce practical tools and methodologies for monitoring and evaluating the fulfilment of the new obligations of employers.
The successful implementation of Directive 2023/970 can improve working conditions, equal pay for men and women, and broader social and economic development. All stakeholders must work together and take measures to ensure an efficient and fair working environment for all employees.
Bibliography
Molnári D., Právne súvislosti viacnásobnej diskriminácie v pracovnoprávnych vzťahoch, [in:] Teoretické úvahy o práve: zborník [príspevkov] z Vedeckej konferencie doktorandov a školiteľov Trnavskej univerzity v Trnave, Právnickej fakulty 22. marec 2024, ed. Z. Adamová, Trnava: Trnavská univerzita v Trnave, 2024, ISBN 978-80-568-0708-8.
[1] In the vast majority of cases, the European Union uses the term “worker” in its documents. This is also the case with Directive 2023/970. On the other hand, Act no. 311/2001 Coll. The Labour Code as amended (hereinafter referred to as the “Labour Code”) uses the term “employee” and does not use the term “worker”. The term “employee” is a legal term denoting a person who performs dependent work for the employer in employment relations, and if this is stipulated by a special regulation, also in similar employment relations. The term worker is a broader term that can be applied to any person performing work, whether or not they are an employee. Given that the relationships that are the subject of our interest are employment relationships, in our interpretation, we will use the term “employee”, taking into account the uniformity of the terminology and its compliance with the Slovak legal order.
[2] Cf. Art. 2 and Art. 3 par. 3 of the EU Treaty and Art. 8 of the Treaty on the Functioning of the EU.
[3] Art. 21 of the EU Charter of Fundamental Rights.
[4] Art. 21 of the EU Charter of Fundamental Rights.
[5] OJ L 45, 19.2.1975, p. 19–20.
[6] OJ L 39, 14.2.1976, p. 40–42.
[7] OJ L 269, 5.10.2002, p. 15–20.
[8] OJ L 188, 12.7.2019, p. 79–93.
[9] European Commision: Gender pay gap statistics. Eurostat, 6 March 2023, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Gender_pay_gap_statistics#Gender_pay_gap_levels_vary_significantly_across_EU, date accessed: 18 October 2024
[10] For example judgment C-66/85, Deborah Lawrie-Blum v Land Baden-Württemberg, ECLI:EU:C:1986:284; judgment C-428/09, Union Syndicale Solidaires Isère v Premier ministre and i, ECLI:EU:C:2010:612; judgment C-413/13, FNV Kunsten Informatie en Media/Staat der Nederlanden, ECLI:EU:C:2014:2411; judgment C-229/14, Ender Balkaya/Kiesel Abbruch- und Recycling Technik GmbH, ECLI:EU:C:2015:455; judgment C-216/15, Betriebsrat der Ruhrlandklinik gGmbH/Ruhrlandklinik gGmbH, ECLI:EU:C:2016:883; or judgment C-658/18, UX/Governo della Repubblica italiana, ECLI:EU:C:2020:572.
[11] „The State Secretary of the Ministry of Labour presented new conditions for equal pay for women in the labour market.” Ministry of Labour, Social Affairs and Family of the Slovak Republic, 8 March 2024, www.mpsvr.sk/sk/uvodna-stranka/informacie-media/aktuality/statny-tajomnik-ministerstva-prace-predstavil-nove-podmienky-rovnakeho-ommenovania- zien-trhu-prace.html, date accessed: 18 October 2024.
[12] D. Molnári, Právne súvislosti viacnásobnej diskriminácie v pracovnoprávnych vzťahoch, [in:] Teoretické úvahy o práve: zborník [príspevkov] z Vedeckej konferencie doktorandov a školiteľov Trnavskej univerzity v Trnave, Právnickej fakulty 22. marec 2024, ed. Z. Adamová, Trnava: Trnavská univerzita v Trnave, 2024, p. 238.
[13] Cf. point 28 of the recital of directive 2023/970.
[14] See § 62 par. 2 of Act no. 5/2004 Coll. on employment services and on amendments to certain laws as amended (hereinafter referred to as the “Employment Services Act”).
[15] See § 41 par. 5 and 6 of the Labour Code.
[16] Cf. § 9 par. 2 of the Anti-Discrimination Act.
[17] Under § 79 of the Code of Civil Procedure.
[18] See § 1 par. 3 of the Act on the Establishment of the Slovak National Centre for Human Rights, as amended (hereinafter referred to as the “Act on the Establishment of the Slovak National Centre for Human Rights”).
[19] § 101 Act no. 40/1964 Coll. Civil Code.
[20] § 19 par. 1 letter a) of Act no. 125/2006 Coll. on labour inspection and on amendments to Act 85/2005 Coll. on illegal work and illegal employment and on amendments to certain laws as amended (hereinafter referred to as the “Labour Inspection Act”).
[21] § 19 par. 6 of the Act on Labour Inspection.
