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Pay differences between recruitment consultants (TAS 293/2018 issued on 26 August 2019)

Female employee A and her male colleague B, who both worked as recruitment consultants, started to work in the company at the same time. Initially, A was paid a lower salary for a period of nine months. Employee B, who, unlike A, was aware of the pay difference between them, proposed that the employer would increase A’s salary. B considered that he and A carried out similar duties with similar results. At first, the employer did not agree to remedy the pay difference, but later agreed to do so after the male employee B proposed that his salary be lowered and A’s salary be raised. Thus, A and B were paid equal salary from then on.

When A later became aware that her colleague B had received a higher salary for nine months, she considered that she had been discriminated against in violation of the Act on Equality between Women and Men (609/1986) and demanded the employer to reimburse the pay difference for said period. As the matter could not be settled, A called upon the Ombudsman for Equality to resolve the suspected pay discrimination.

Assessment of the case

Same work or work of equal value

It was first assessed whether A and her male colleague B carried out the same work or work of the same value. The employer claimed that the male colleague had more relevant work experience in terms of the duties performed and that he was therefore recruited to carry out more demanding assignments than A. The employer also stated that a more demanding future role in the company had been planned for the male employee.

Based on the reports received, the Ombudsman for Equality considered that in practice, both employees carried out the same work. The Ombudsman for Equality also stated that the assessment of whether the work performed was the same or of equal value should not be affected by a possible, more demanding job description planned for the future. In addition, the more demanding role was, in the end, offered to A as well. As the differences in duties were not considered to explain the pay differences, it was assessed whether the employer had another, acceptable reason for paying a higher salary to the male employee.

Was there an acceptable justification for the pay differences?

Differences in the type of work experience. In its statement, the Ombudsman for Equality examined whether the differences in the type of work experience (i.e. not duration) could constitute an acceptable basis for pay differences between the employees performing the same duties from the start of their employment relationship. In addition, it was assessed whether such a difference was applicable to this case. Based on the reports received, the Ombudsman for Equality considered that there was no qualitative difference in work experience between A and her male colleague B. In addition, differences related to work experience did not reflect in their duties or affect the team’s working methods. Moreover, the differences did not affect the distribution of customer relationships or commissions.

Scarcity of financial resources. According to the employer, the position of recruitment consultant was initially budgeted for one person only. Thus, it would not have been possible to raise the salaries at the time when the male employee first proposed that A’s salary be increased. However, in case law, the scarcity of financial resources has not been considered an acceptable justification for differences in pay between genders.

Rectification of discriminatory pay. The employer rectified the pay difference between A and her male colleague B by lowering B’s salary and increasing A’s salary. In accordance with the Equality Act, the measure for rectifying individual pay discrimination cases is not to reduce the reference salary, but to raise the pay of the discriminated person to the level of the reference salary.
The Ombudsman for Equality considered that A and her male colleague B had carried out the same work, and that the employer had not presented an acceptable reason for the pay difference. Based on this, the pay difference was considered to be in violation of the Equality Act. Ultimately, however, the matter will be assessed at court in a possible compensation claim case.