Employees in identical positions must earn the same salaries regardless of regional differences in individual regions of the Czech Republic, such is the predominant interpretation of the recent ruling of the Supreme Court. Pavel Bejšovec, a lawyer working for Deloitte Legal, points out that the entire issue is more complicated: “It is not necessary to see the situation in absolute terms and automatically remunerate all employees in an identical position with the same salaries. Differences in remuneration are possible, if the employer is able to justify the reasons for the differences in an adequate manner and if these differences are based on clearly set and fair rules.”
What is, in your opinion, the most important matter in the ruling of the Supreme Court?
This ruling covers pay gaps of employees who do comparable work in various regions, more specifically in the case in point, in Olomouc and Prague. In its ruling, the Supreme Court of the Czech Republic stated that it was not acceptable, from the perspective of the equal treatment principles, that social and economic conditions of the specific region should be taken into account in the remuneration of employees of the same employer who do comparable work, but in different regions of the Czech Republic.
This issue has not been discussed by the Supreme Court of the Czech Republic so far. To date, courts have rather dealt with the remuneration at one workplace, or at close workplaces in the same region in their case law, so the ruling is truly a breakthrough in this context. On the other hand, I believe that the ruling itself was not surprising, as part of the professional public have already favoured the above conclusions.
How do you assess the ruling from the perspective of your work practice?
In our practice, we see that the matter of equal treatment has received increased attention. It is for example a frequent topic of inspections by the Labour Inspectorate which is responsible for this field and performs the inspections both at its own initiative or following someone else’s suggestions. In general, we also feel that our law firm is rather often contacted by employers regarding the issues of equal treatment already now and they take these issues into account in their decision making processes. It can be expected that the number of such employers will increase.
However, it is necessary to mention that this opinion of the court may have unfavourable implications for the employers as the labour market and the economic situation of the region have an impact on the salary in practice. If the above rule were to apply unreservedly, this opinion on the remuneration may have a negative impact on the economic sustainability of certain workplaces in certain regions.
Does this ruling fit in the existing case law? And in trends in labour law?
It is a very interesting topic, very much discussed already before the ruling was issued; however, there have not generally been many cases where employees would be successful in disputes regarding equal treatment. Given that the general trend in labour law is transparency, fair pay and issues relating to equal treatment and ban of discrimination, we can surely agree that this judicial decision does not deviate from the current trends in labour law.
How should the employers reflect the above decision?
The employers should review the employee remuneration system and map how individual employees are paid. If they identify pay differences in employees who work on identical positions, they should assess whether there is a factual and justifiable reason for such differences. In the light of the discussed judicial decision, it is naturally worth considering whether the reason for pay differences might actually be only the region of individual workplaces and establishments of the employer.
What may be additional appropriate steps that firms should take?
First of all, employers should establish a transparent system of employee remuneration. However, it is not necessary to see the situation in absolute terms and automatically remunerate all employees on identical positions by the same pay. Pay differences are possible, if the employer is able to justify the reasons for the differences in an adequate manner and if these differences are based on clearly set and fair rules.
And what about the employees who feel that they earn less than they should, what can they do?
The legal system grants more options to employees. If an employee believes that he/she does not receive equal treatment from the employer in terms of remuneration, he/she may contact a relevant local labour inspectorate to make a complaint. Naturally, it is also possible to bring an action to a court.
Does the ruling increase their chances for success?
I believe that it does. Taking into account the media coverage of the case, it can be additionally expected that employees will get more interested in these issues and we can expect that it will result in an increase in legal disputes with employees. At the same time, we can expect that trade unions will come into play, which may result in further pressure on employers in this matter.
The article was published at the info.cz website on 27 August 2020.