The Supreme Court recently issued a reasoned opinion on certain legal and procedural aspects of employment-related suits involving equal treatment claims. Although the opinion is not a source of law, it will serve as guidance for legal practitioners and courts dealing with such claims.
The reasoned opinion addresses, among other things:
- the interpretation of the burden of proof in employment-related suits involving equal treatment claims;
- the equal pay principle;
- the concept of discrimination based on other grounds; and
- the way of hearing and deciding anti-discrimination claims in suits initiated on the grounds of unlawful dismissal.
The relevant EU directives (2000/43/EC, 2000/78/EC and 2006/54/EC) have been transposed into Hungarian law. Thus, an aggrieved party (ie, the party suffering discrimination, which in employment-related cases is typically the employee) must make it probable (but not prove) that he or she:
- has suffered the consequences of discrimination; and
- had an attribute protected by law at the time of the discrimination (eg, gender, age, racial or ethnic origin, religion or skin colour).
The reasoned opinion highlights that employees suffering discrimination do not have to prove the causal link between the protected attribute and the consequences suffered, as is the case for a damage claim. This is notable, as the existence of a causal link has been a heavily disputed issue in employment-related cases involving equal treatment claims and court practice has not been entirely coherent in this regard.
Conversely, in such cases, an employer must prove that it has not violated the anti-discrimination rules. In particular, employers must show that:
- there is no causal link between the protected attribute and the disputed measures; and
- the measures themselves have not violated anti-discrimination rules because:
- the employee did not have a protected attribute;
- the employee was not discriminated against in comparison with another group; or
- the employer was not obliged to comply with the anti-discrimination rules for a lawful reason (ie, positive discrimination).
Equal pay for equal work principle
In general, the compensation paid for work (eg, a wage or salary) is subject to the parties' agreement. For the most part, the legislature does not wish to influence this bargaining process, although there are certain exceptions (eg, the statutory minimum wage).
However, some principles, such as the equal pay principle, must be observed by employers.
The Hungarian regulations addressing the equal pay principle have changed in recent years and have been weakened to a certain extent. The reasoned opinion points out that – as opposed to the Labour Code 1992, which stipulated that the equal treatment principle applies specifically to the establishment of wages – the existing Labour Code sets out the equal treatment principle generally and states that it also applies to remuneration.
The existing Labour Code provides that the equal value of work for the purposes of the equal treatment principle will be determined based on, in particular:
- the nature of the work performed;
- the quality and quantity of the work performed;
- the employee's working conditions;
- the required vocational training;
- the physical or intellectual efforts expended by the employee;
- the employee's level of experience;
- the employee's responsibilities; and
- the labour market conditions.
Based on this latter concept (differentiation on the basis of labour market conditions), employers are generally not prohibited from paying different remuneration for the same job in different parts of the country. This happens in practice, as remuneration tends to be higher in Budapest than in less urbanised or poorer regions.
The reasoned opinion states that claims relating to the violation of the equal pay principle must be adjudged similarly to all other equal treatment claims. In other words, the employee must state that he or she:
- has an attribute protected by law; and
- suffered discrimination (ie, received a lower remuneration than employees in comparable positions) due to that attribute.
Without claiming such an attribute, the violation of the equal pay principle cannot be established and adjudged.
Discrimination based on other grounds
Both the relevant EU and Hungarian regulations provide a non-exhaustive list of protected attributes based on which any differentiation is prohibited. All such lists provide that discrimination is also prohibited based on any other grounds.
The definition of 'other grounds' has often created problems in practice, as employees have often tried to use this legal basis to create unfounded discrimination claims in cases where they felt that they were treated unfairly (eg, an employee's bad relationship with his or her superiors may have formed the alleged basis for discrimination). The reasoned opinion highlights that in such cases, employees may use other legal grounds to seek legal remedy (eg, abuse of right or the violation of the good-faith cooperation principle).
The reasoned opinion establishes that 'other grounds' may be attributes that:
- form an integral part of a person's personality; or
- link the person to a group of people that is exposed to discrimination.
The courts must evaluate the existence of such factors on a case-by-case basis before deciding on the admissibility of any equal treatment claim.
Discrimination claims in unlawful dismissal cases
Dismissals are often challenged in the courts on the basis of being discriminatory. The reasoned opinion concludes that in such cases – depending on the exact claim – the courts must examine the formal lawfulness of the dismissal, including its reasoning (eg, whether it is true or valid), before they can examine its discriminatory nature.
The distinction of these two aspects is important, as the legal consequences of unlawful and discriminative dismissals are different. If the court establishes that a dismissal was discriminative, the employee may request his or her reinstatement. However, if the dismissal was unlawful for other reasons (eg, incorrect justification or a violation of certain formalities), damages may be claimed, but there may be no reinstatement.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
For further information on this topic please contact Dániel Gera at Schoenherr Hungary by telephone (+36 1 8700 700) or email ([email protected]). The Schoenherr website can be accessed at www.schoenherr.eu.
