Kruger v Kreis Krankenhaus Ebersberg [1999] IRLR 808
In a welcome decision, the ECJ refuses to allow an employer to justify gender-based discrimination in pay on the basis of broad social policy objectives. The case is important because it clearly distinguishes between discriminatory measures which relate to a particular aspect of social policy adopted by a member state (or some essential concept of national security) which may be used as the foundation for justifying discrimination in the social security context, and pay discrimination of workers by their employer, where a more stringent test of objective justification may be applied.
Ms Kruger worked as a nurse in Bavaria. She originally worked full-time, but, when she transferred to part-time work, her employers refused to pay the normal Christmas bonus. The employer set out to justify the refusal to pay her a bonus by reference to the collective agreement covering public sector employment in Germany.
The European Court of Justice had no difficulty in identifying the bonus payment as an element of 'pay', for the purpose of Article 141 of the EU Treaty (formerly Article 119). It left it to the national court to determine whether the difference in treatment, through non-payment of the bonus to part-timers, affected a considerably higher proportion of women than men. The issue before the European Court of Justice therefore turned on the question of objective justification.
In previous decisions relating to the former Article 118 of the EU Treaty, and matters of social security, the ECJ has been prepared to allow member States to rely upon policy considerations by way of objective justification. For example, the German Government had previously been able to justify its decision to exclude individuals in 'minor employment' (the majority of whom have been women) from entitlement to a particular social security benefit by reference to social policy. In Ms Kruger's case, the ECJ confirmed that, in matters of social policy, member States should indeed be allowed a wide area of discretion.
However, the ECJ found that different considerations applied to Ms Kruger and matters of social policy were not relevant. The discrimination which she had suffered was nothing to do with a measure of social policy adopted by a Member State or some social security concept. Instead, she was objecting to a provision contained in a collective agreement. Therefore, Ms Kruger's case did not involve an issue of social policy and her employer was unable to justify objectively the decision not to pay her a bonus on the broad social policy grounds it put forward.
In other words, even though it was not unlawful for the German government to discriminate against workers in "minor employment" on grounds of social policy, the same argument will not necessarily hold good for employers.
Ms Kruger's case draws an important line between cases relating to social security and state benefits, where social policy objectives may be applicable so as to justify potential discrimination, and those relating to the relationship between workers and employers where such considerations will not apply so as to justify discriminatory pay practices.
The case may well be of assistance further down the line in the part-time worker pension claims. Certainly in private sector schemes, it will not be possible for employers to justify the exclusion of part-timers by reference to broad policy objectives.
It could also be highly relevant in any challenge to the Lower Earnings Limit and access to Statutory Sick Pay which indirectly discriminates against women, following the EAT decision in Banks v Tesco (see Issue 40 of LELR) that Statutory Maternity Pay is covered by Article 141, and not Article 118.