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05. Pay Equity Laws

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05. Pay Equity Laws

Extent of Protection

A. Prohibition of all forms of discrimination

Whether it is a question of salary, qualification or classification, no employee may be the object of direct or indirect discriminatory measures because of age, sex, marital status, pregnancy, trade union or mutualist activities, political opinions, religious beliefs, origin, morals, sexual orientation, gender identity, genetic characteristics, particular vulnerability resulting from his or her apparent or known economic situation, physical appearance, his surname, place of residence, bank address, actual or supposed membership or non-membership of an ethnic group, alleged race, nationality, state of health, loss of autonomy, handicap, ability to express himself in a language other than French or normal exercise of the right to strike (Article L. 1132-1 and L. 1132-2 of the Labour Code).

Union discrimination is also prohibited by Article L.2141-5 of the same code. In addition, there may be no discrimination against an employee who has suffered, or refused to suffer, sexual or moral harassment (Articles L. 1152-2 and L. 1153-2 of the same Code) or who has reported or testified to one of these acts (Articles L. 1132-3, L. 1152-2 and L. 1153-3).

However, the list of prohibited discriminatory conduct does not prevent differences in treatment that meet an essential and decisive professional requirement, provided that the objective is legitimate and the requirement is proportionate (Article L. 1133-1 et seq.; Law n°21008-496, 27 May 2008).

Differences in treatment based on unfitness observed by the occupational physician due to a state of health or disability, do not constitute discrimination when they are objective, necessary and appropriate (Article L. 1133-3).

Differences in treatment based on age are also permitted when they are objectively and reasonably justified by a legitimate aim; in particular, by the concern to preserve the health or safety of workers, to promote their occupational integration, to ensure their employment, their redeployment or their compensation in the event of loss of employment, and when the means to achieve this aim are necessary and appropriate (Article L. 1133-2).

The same applies to measures taken in favour of disabled persons, persons residing in certain geographical areas or persons who are vulnerable because of their economic situation, when they are intended to promote equal treatment (Articles L. 1133-4, L. 1133-5 and L. 1133-6).

B. Principle of “equal pay for equal work“

The employer is required to ensure equal pay for employees in an identical situation who perform the same or equivalent work (articles R. 2261-1 and L. 2271-1; Cass. soc., 29 Oct. 1996, no. 92-43.680, Ponsolle). Only objective and relevant elements can justify a difference in wages. Thus, the employer is required to ensure equal pay for men and women when they perform the same work or work of equal value (article L. 3221-2).

Equal pay must also be guaranteed between employees on permanent contracts and employees on fixed-term or temporary contracts, when they perform the same duties and have an equivalent qualification (Articles L.1242-15 and L.1251-18). The same applies between full-time employees and part-time employees with equal qualifications and seniority (Article L. 3123-5).

The compensation to be taken into account, includes the basic or minimum wage and all other benefits and accessories paid directly or indirectly, in cash or in kind, by the employer to the employee by reason of his employment (Article L. 3221-3).

Failure to comply with the principle of equality between men and women constitutes discrimination. Nevertheless, a recall of salary made on the basis of the principle “equal pay for equal work” does not require that the discrimination be proven.

C. Equal treatment

Beyond salary, professional equality (which includes qualification, classification and promotion), must be ensured (article L. 1142-1). More generally, the French supreme court ruled in May 2007 that “a difference in treatment between employees placed in the same situation must be based on objective reasons, the reality and relevance of which the judge must concretely control.”

Remedies

The primary remedy is the payment of backpay.

Any provision contained, in particular, in an employment contract or collective agreement which, for the same work or work of equal value, entails lower remuneration for one or more workers of either sex than for workers of the other sex, is null and void. The higher remuneration is then automatically granted to the injured employee (article L. 3221-7).

In addition to a wage recall, the employer is exposed to the following risks:

a. Name and Shame

The aim is to make public the names of companies that do not comply with diversity and equality policies. “Reputation” is a weapon to force companies to implement professional equality. In terms of gender equality, at present, this measure is reinforced with the obligation to publish the professional equality index.

b. Civil Sanctions

i) At the employee’s initiative

Any provision, measure or act contrary to the principle of non-discrimination is null and void, including a clause in a collective agreement or a contract of employment which reserves the benefit of a measure to a person, or on the contrary excludes him from it, on grounds prohibited by article L. 1132-1 (articles L. 1146-1 to L. 1146-3).

The “reprisal” dismissal, following the employee’s legal action, is null and void: the employee must be reinstated (article L. 1144-3; Cass. soc., 28 Nov. 2000, no. 97-43.715). The employee may also claim damages for moral prejudice if the discrimination suffered infringes his dignity, by suggesting to the work community that he has behaved in a way that does not deserve fair wage recognition (Paris Court of Appeals, 21st c. 9 May 2000, Cochin v. Entreprise Pierre Simon).

An employee who is the victim of both moral harassment and discrimination may claim double compensation if he demonstrates the existence of distinct damages (Cass. soc., 7 Jan. 2015, no. 13-15,630; Cass. soc., 3 March 2015, no. 13-23,521).

In any case, in the event of a dispute, the employee benefits from an adjustment of the burden of proof. The employee must present factual elements suggesting the existence of direct or indirect discrimination. The employer must establish that his decision is justified by objective elements unrelated to any discrimination (article L. 1134-1). Thus, the judge will decide by assessing all of the elements as a whole, and not by analysing them separately (Cass. soc., 29 June 2011, no. 10-15.792).

An employee who believes that he is a victim of discrimination, but who does not have any evidence at his disposal in order to take action, may apply to the industrial tribunal in summary proceedings, before any trial on the merits, to obtain from the employer, the documents necessary to protect his rights (e.g., employment contracts, pay slips, calculation of bonuses, tables of promotions and advancement of employees performing the same duties) (Cass. soc., 19 Dec. 2012, nos. 10-20,526 and 10-20,528; Cass. soc., 12 June 2013, no. 11-14,458).

ii) At the initiative of other actors

Procedure for alerting members of the staff delegation to the CSE. When the members of the Social and Economic Committee (Works Council) become aware of a discriminatory measure, in particular with regard to remuneration, they must refer the matter to the employer. The latter, or its representative, must then, without delay, carry out an investigation with the member of the CSE and remedy the situation. If the employer fails to act or if there is a difference of opinion on the reality of the discrimination, and if no solution is reached with the employer, the injured employee (or the member of the CSE if the employee has not opposed it) refers the matter to the industrial tribunal, which rules in summary proceedings (emergency procedure). The judge may order any measure intended to put an end to the discrimination and may add a penalty payment (Article L. 2312-59).

Action by trade unions. The representative unions at the national, departmental or company level may take legal action in favour of an employee with respect to any problem of discrimination related to age, sex, family status, etc. (Article L. 2312-59). They do not have to justify a mandate from the person concerned. It is sufficient that the latter has been notified in writing and has not objected within fifteen days. The employee can always intervene in the proceedings initiated by the trade union (article L. 1134-2). When the discrimination is related to harassment, the representative unions in the company may take legal action subject to the written consent of the interested party (Article L. 1154-2).

Action by associations. Associations that have been duly formed, for at least five years, to combat discrimination or that work in the field of disability, may take legal action against any discrimination in favour of an employee of the company, subject to the written consent of the employee concerned. The employee may intervene in the proceedings initiated by the association and put an end to them at any time (Article L. 1134-3).

c. Criminal Sanctions

When discrimination is linked to one of the prohibited grounds covered by Article L. 1132-1, the employer is liable for a fine of up to EUR 45,000 and three years in prison. The fine may be increased to EUR 22,500 for legal entities (Article 225-1 of the French Penal Code).

Failure to respect equal pay for men and women is punishable by a fine (5th class contravention), applied as many times as there are employees paid under illegal conditions. This fine is doubled in the event of a repeat offence within one year (Article R. 3222-1). If the action is brought not on the basis of the specific text relating to equal pay (Article L. 3221-2), but on the basis of the general principle of professional equality between men and women (Article L. 1142-1), the employer is liable for a fine of EUR 3,750 and a maximum imprisonment of one year (Article L. 1146-1).

d. Administrative Sanctions

Companies that have not implemented, as of 31 December of the year preceding the year in which the public-contract award procedure is launched, the obligation to negotiate on professional and wage equality between women and men or that have been convicted of discrimination under Article 225-1 of the French Penal Code or a violation of the provisions relating to professional equality between women and men under Article L. 1146-1, may not bid for public contracts. This applies to public or private persons not subject to the French Public Procurement Code, partnership contracts and public service delegations (Law no. 2014-873, 4 Aug. 2014, OJ 5 August; Ordinance no. 2015-899, 23 July 2015, art. 45; Ordinance no. 2016-65, 29 Jan. 2016, art. 39).

e. Financial Penalties

In matters of professional equality, the employer may be subject to two different penalties.

Companies with at least 50 employees are exposed to a penalty equal to 1% of wages and earnings within the meaning of Article L. 242-1 of the Social Security Code, when they are not covered by a collective agreement relating to professional equality (Article L. 2242-1) or, failing that, by an action plan (Article L. 2242-3). They are also exposed to this penalty when they have not calculated and published the professional equality index, or when they have not subsequently taken steps to eliminate it over three years (Article L. 1142-10).

The actual amount of the penalty is set by the Direccte, seized by a report from a labour inspectorate control officer, based on the efforts observed in the company with regard to equal pay between women and men, and the reasons for failure to do so.

Enforcement/Litigation

The Court of Cassation has clarified the notion of work of equal value (A), making it possible to assess the existence of a difference in treatment (B).

a. Assessment of the existence of a comparable situation

Equality is assessed with regard to work of equal value, which requires a comparable set of professional knowledge, abilities derived from experience, responsibilities and physical or psychological burden (article L. 3221-4). The work of male handlers loading and unloading trucks and the work of female workers sorting mushrooms is thus of equal value (Cass. soc., 12 Feb. 1997, n°95-41.694).

If the employer is required to ensure, for the same work or for work of equal value, equal pay between men and women, employees who are performing different functions do not carry out work of equal value.

Judges must compare the situation, duties and responsibilities of the person concerned with those of other employees. The fact that the employees being compared were working in different regions is irrelevant (Cass. soc., 25 March 2015, no. 14-10.149).

The HR manager, who contested the disparity in her compensation with that of her male colleagues, won her case, because the tasks performed, the hierarchical level, the classification, the responsibilities and the importance of the tasks to the company were comparable and since the demands of the positions represented a similar psychological burden (Cass. soc., 6 July 2010, no. 09-40.021).

b. Permissible differences in treatment

Differences in remuneration are possible if they are justified by objective elements, in particular the requirement of additional work demanded of men (Cass., soc. 16 March 1989, no. 86-45.428).

For example, certain bonuses, linked in particular to the presence of children, may be reserved for women, especially in order to remedy de facto inequalities affecting a woman’s opportunities (article L. 1142-4) or in application of provisions relating to the protection of pregnancy and maternity, paternity or adoption leave, and breastfeeding (article L. 1142-3).

Thus, a lump-sum allowance may be paid only to women who go on maternity leave, if it is intended to compensate for the resulting professional disadvantages to these female workers. On the other hand, an allowance for birth or adoption, outside of the above-mentioned cases, may not be reserved for one of the sexes, exclusively (Cass. soc., 8 Oct. 1996, n°92-42.291).

Overall, pay differentials may be based on greater responsibilities and workloads for the best paid employees (Cass. soc., 26 Sept. 2018, No. 17-15.101). An increase in professional experience or skills, in line with the requirements of the position and the responsibilities actually exercised, may justify better pay (Cass. soc., 31 Oct. 2012, No. 11-20.986).

However, the Court systematically rejects criteria such as nationality (Cass. soc., 17 Apr. 2008, n°06-45.270), diplomas (Cass. soc., 29 Jan. 2014, n°12-20.780), professional category (Cass. soc., 20 Feb. 2008, n°05-45.601) or membership in different institutions (article L.3221-5).

Other Requirements

a. Obligation to take measures to achieve the goal of equality

In companies of at least 50 employees, the employer is required to negotiate with a union delegate in order to achieve the objective of equality, or failing that, to establish an action plan. In the absence of a union delegate and if the company is not covered by an industry agreement on equal pay for women and men, it is up to the employer to take measures to achieve the objectives of professional equality (Article L. 1142-5). Failure to do so exposes the company to a financial penalty.

b. Obligation to take measures to eliminate pay gaps

Law n°2018-771 of 5 Sept. 2018, requires companies with at least 50 employees to calculate and publish a professional equality index, the purpose of which is, based on regulatory indicators, to measure the pay gap between women and men. The result obtained by the company must be published annually, no later than 1 March of the current year, on the company’s website, if it exists.

Failing this, this figure shall be made known to employees by any means. Through the BDES, the employer sends the CSE and the Ministry of Labour detailed information on the calculation procedures and methodology used. In concrete terms, the index includes four to five indicators, namely the pay gap per age group and per category of equivalent positions, the difference in the rate of individual salary increases (excluding promotions), the difference in the rate of promotions, the percentage of female employees having benefited from an increase in the year they return from maternity leave, and the number of employees of the under-represented sex, among the 10 employees receiving the highest pay.

If the overall result is less than 75, corrective measures must be adopted through negotiations on professional equality or, failing that, solely by the employer (Articles L. 1142-7 to -9 and D. 1142-3 to -8).

The employer has a period of 3 years to correct any discrepancies observed. If, at the end of the three-year period, the results are still below 75, the employer may be subject to a financial penalty set at a maximum of 1% of the remuneration, subject to social security contributions paid during the calendar year preceding the end of the period.

 

 

 

 

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