Employment Court (Juzgado de lo Social) No. 26 of Barcelona has ordered the company to pay €25,000 in damages for infringement of the fundamental right to equality and non-discrimination on grounds of sex — in this case in relation to pay — in addition to ordering payment of the salary supplement that the company had refused to pay.
Maternity leave does not prevent an employee from receiving the same salary she would have received had she not been on leave for that reason, including any variable component. This is, quite simply, a ruling that reaffirms the rights of working women.
Despite the company having an established Equality Plan, the court found that such an infringement had nonetheless occurred.
Written by Josep Conesa
Employment and insolvency lawyer
employment tribunal No. 26, Barcelona, ruling 309/2019 of 3 Oct. 2019, Case No. 56/2019
Judge: Escribano Vindel, Carlos.
ruling No.: 309/2019
appeal No.: 56/2019
Jurisdiction: EMPLOYMENT
TEXT
employment tribunal NO. 26
BARCELONA
Proceedings: Protection of fundamental rights, Case No. 56/2019
ruling No. 309/2019
In Barcelona, on 3 October 2019, I, Carlos Escribano Vindel, judge of employment tribunal No. 26 of Barcelona, having examined the present proceedings numbered 56/2019, brought at the instance of Ms Lucía against the company XXXXXXXX, with the participation of the PUBLIC PROSECUTOR'S OFFICE, concerning protection of fundamental rights (modules: class B.16), in which the following facts have been established,
STATEMENT OF FACTS
FIRST.– On 3 January 2019, a claim was filed — subsequently assigned to this Court — in which the claimant employee alleged that she had suffered discrimination on grounds of sex by not receiving the variable pay component (bonus) corresponding to the 2018 financial year, despite it having been paid consistently in previous years. The company justified the non-payment on the basis that, having been absent for most of the year, her performance could not be assessed. The claimant argued that such a reason for refusal constituted sex discrimination, as her absences were due to her pregnancy and the subsequent birth of her daughter.
She further alleged that, for the same reasons, her salary had not been increased.
She requested that the court declare her fundamental right not to suffer discrimination had been violated; that the company be ordered to immediately cease its discriminatory conduct; that the company be ordered to pay the amount corresponding to the 2018 bonus, plus default interest; and that the company be ordered to pay additional compensation of €25,001.
SECOND. Having been scheduled for a fixed date and time, the conciliation hearing and, if applicable, the trial took place on 30 September 2019, with both parties in attendance; the Public Prosecutor did not appear, despite having been duly notified.
During the submissions stage, the claimant confirmed her claim, clarifying that the amount claimed as bonus was €5,914.90 net, equivalent to €7,980 gross.
The company sought dismissal of the claim, noting that its financial year runs from July to June of the following year, meaning the bonus claimed related to the 2017/2018 financial year, and that the variable remuneration or bonus was not a consolidated entitlement, being dependent on business results and an individual assessment of each employee's performance. It argued that company policy was not to assess employees who had not performed effective work for a minimum of 6 months, regardless of sex or the reason for absence. The claimant's absences during the 2017/2018 financial year lasted 7 months and 10 days. The company also noted that the temporary disability (IT) leave prior to maternity leave was not due to risk during pregnancy, as stated in the claim, but rather to the employee's common illness. Regarding salary increases, it argued that these were not applied on a flat-rate basis but varied from employee to employee, irrespective of sex. It noted that the company has an Equality Plan in place and is particularly committed to supporting maternity, having topped up the claimant's corresponding Social Security benefits to 100% of her regulatory salary, even though no collective agreement required it to do so. Finally, it confirmed that in the following financial year, 2018/2019, it had paid the claimant her variable remuneration and had proceeded to increase her salary.
In the alternative, the company opposed the additional compensation sought, challenging the quantification put forward and noting that no criteria had been provided to assess the alleged harm suffered by the employee.
The proposed and admitted evidence was then examined.
In closing submissions, the parties requested that a ruling be issued in accordance with their respective claims, after which the proceedings were adjourned pending ruling.
THIRD.- The legal requirements have been observed throughout these proceedings, except with regard to compliance with procedural time limits, due to a backlog of cases.
FINDINGS OF FACT
FIRST.- The claimant, Ms Lucía, an adult, holding national identity document number NUM000, is employed by the company XXXXXXXX (Tax Identification Number (CIF) number NUM002), registered address in the city of Barcelona, with a start date of 4 July 2005, and holding the professional grade of Associate Director (Grade 3).
SECOND.- While pregnant, the claimant was signed off on sick leave for a common illness on 27 September 2017, due to foetal growth deficiency affecting the mother's treatment (document no. 19 of the claimant's evidence bundle).
On NUM001 2017, the claimant's daughter was born (document no. 26 of the claimant's evidence bundle), following which the claimant was discharged from sick leave (document no. 25 of the claimant's evidence bundle) and commenced maternity leave.
The claimant requested to take her breastfeeding entitlement as a single consolidated block of leave, immediately following her maternity leave, between 3 and 23 April 2018 (document no. 29 of the claimant's evidence bundle).
Between 23 April and 6 May 2018, the claimant took annual leave (document no. 31 of the claimant's evidence bundle).
From 7 May 2018, the claimant has been working a reduced schedule of 25%, for the purpose of caring for her daughter (document no. 32 of the claimant's evidence bundle).
THIRD.- During the claimant's absence, first on temporary disability (IT) and subsequently on maternity leave, the company topped up the corresponding Social Security benefits (payslips — documents no. 12 and following of the respondent's evidence bundle).
FOURTH.- The respondent company's financial year runs from 1 July to 30 June of the following year.
FIFTH.- The company operates a variable remuneration or bonus scheme which is not governed by any agreement, regulation or policy, and which provides for an annual variable payment determined by each employee's line managers based on their assessment of that individual's performance.
SIXTH.- The defendant company paid the claimant the following amounts as bonus payments:
Financial year 2013/2014: €5,820 gross.
Financial year 2014/2015: €7,480 gross.
Financial year 2015/2016: €8,480 gross.
Financial year 2016/2017: €7,980 gross.
SEVENTH.- The company did not recognise any amount due to the claimant as a bonus for the 2017/2018 financial year.
When the claimant sought an explanation, suggesting this might constitute discrimination, the company sent her an email on 16 October 2018 rejecting the existence of any discrimination and maintaining that she had not been assessed and had not been awarded any variable pay on account of her having been absent for an extended period during that financial year. This, the company stated, was the company's current policy applicable to performance assessments, on the basis that an adequate evaluation of an employee's performance is not feasible in such circumstances.
EIGHTH.- The company did not assess the performance of, nor pay a bonus to, 12 employees for the 2017/2018 financial year, all of them on account of long-term absences (exhibit no. 5 of the defendant's evidence bundle).
3 of them are men (2 on long-term sick leave and 1 subject to a 6-month suspension of contract).
The remaining 9 are women (including the claimant): 1 on a leave of absence; 4 on long-term sick leave (including the claimant); and the other 4 on extended maternity leave.
NINTH.- At the start of each of the 2015/2016, 2016/2017 and 2017/2018 financial years, the company increased the claimant's salary, with effect from 1 October of each year.
More specifically, on 1 October 2017 the claimant's salary increased from €56,112 per annum to €56,686 (an increase of 1.01%).
On 1 October 2018, the claimant's salary was not increased.
TENTH.- The company has an Equality Plan approved on 3 December 2011, the full text of which is incorporated herein by reference (exhibit no. 21 of the defendant's evidence bundle).
LEGAL GROUNDS
FIRST.- In compliance with the requirements of Article 97(2) of the Law Regulating Social Jurisdiction (Act 19110/2011) (LRJS), it must be noted that the foregoing declaration of proven facts is the result of the following assessment of the evidence adduced at the hearing.
The first finding of fact is not in dispute.
The second and third findings of fact are supported by documentary evidence.
The fourth and fifth findings of fact are not contested.
The sixth finding of fact arises from the bonus recognition communications sent by the company prior to the hearing, at the claimant's request.
The seventh finding of fact arises from the printed email correspondence exchanged between the claimant and the company, submitted by the defendant at the claimant's request before the hearing.
The eighth finding of fact is supported by documentary evidence.
The ninth finding of fact arises from the salary increase notifications issued by the company to the claimant and submitted to the Court by the defendant prior to the hearing.
The tenth finding of fact is supported by documentary evidence.
As the parties were already advised, this is a purely legal dispute. Its resolution turns on whether the company's policy of not paying variable remuneration where an employee has been absent for more than six months during a financial year — without making any exception for absences related to maternity — is or is not discriminatory.
SECOND.– As has been established as proven, the company operates an incentive scheme consisting of variable remuneration or a bonus, accruing each financial year (from July to June of the following year).
This scheme is not governed by any legal instrument, either as regards the amounts payable or the criteria for its award or refusal. It depends exclusively on each professional's line manager's assessment of their work.
It is plain that this is a scheme that is manifestly capable of improvement, entirely lacking in objectivity, opaque in its operation, and fertile ground for arbitrary decisions.
However, these aspects have not been challenged and are therefore not the subject of judicial scrutiny; nor is it disputed that this constitutes a non-consolidated salary supplement.
The company argues — and on this point it must be accepted — that in cases of very prolonged absences exceeding six months within a single financial year, it becomes very difficult or impossible to assess the professional's work. Accordingly, it applies an internal policy of neither appraising the employee nor paying the bonus. This policy is applied regardless of the employee's sex or the reason for their absence.
Considered in isolation, the employer's policy may appear neutral and entirely impartial. However, in practice it has a disproportionate impact on women, by reason of a circumstance inherent to their sex: the biological fact of maternity. To such an extent that any worker who carries a pregnancy to term will be subject to the application of this policy, since the combination of maternity leave, breastfeeding leave, and annual leave alone will cause her absence to be deemed prolonged.
Particularly significant in this regard is document no. 5 from the company's body of evidence, the contents of which are reflected in the eighth proven fact.
The gender composition of the company's workforce is unknown; however, in the 2017/2018 financial year, of the 12 professionals whose work was not assessed due to long-term absences, no fewer than 9 were women. Of those 9, the company itself acknowledges that 4 were absent due to maternity. In reality, the number is higher, as the company classifies the claimant's own prolonged absence as sick leave, when it is clear that it was also maternity-related.
In this connection, and contrary to the company's submissions, it must be noted that the claimant's absence during the 2017/2018 financial year was caused exclusively by her maternity. It is true that the initial leave was classified as temporary disability (IT) arising from a common illness, rather than as risk during pregnancy, as stated in the claim. However, regardless of the contingency under which the worker formally sought cover, it is evident — and is reflected in the second proven fact — that the sick leave was caused by pregnancy complications. This was a circumstance the company could easily have inferred, given that it arose at an advanced stage of pregnancy, when that pregnancy was plainly visible, and immediately prior to the commencement of maternity leave.
We are therefore dealing with clear discrimination which, while it might initially appear to be indirect in nature, is treated in law as direct discrimination — as will be explained below — by virtue of its connection to pregnancy.
The employer's practice of not assessing a professional on account of a prolonged absence is justified where that absence is voluntary on the part of the employee, such as in cases of unpaid leave or employment contract suspension, including disciplinary suspension. It is not justified, however, where the absence is connected to maternity, a biological reality inherent to women.
It is not necessary to rule here on whether such a practice is justified in cases of absence due to illness. It would, of course, equally constitute discrimination in cases of disability. In any event, that issue falls outside the scope of the present proceedings.
Nor can we analyse the impact that the progressive extension of the new ground for employment contract suspension on account of the birth of a child — introduced by Royal Decree Ley 6/2019 (No. 3033/2019), which extends to the parent other than the biological mother — will have, as that provision was not yet in force at the time of the events under consideration.
The reasoning set out above applies equally to the salary increase, which also appears to depend on the employer's assessment of each professional's performance in the immediately preceding financial year, and which was likewise denied to the claimant in October 2018, despite having been granted in all previous years.
However, we make no finding in respect of the bonus corresponding to the 2018/2019 financial year, nor in respect of the salary increase applied in October 2019, as these were not the subject of the claim and their introduction into the proceedings at the hearing itself was out of time and inadmissible, in order to remove any possibility of a violation of the right to a proper defence.
As is well established, Article 14 of the Spanish Constitution (No. 2500/1978) (CE), alongside the principle and right to equality before the law, enshrines the fundamental right not to suffer discrimination on grounds including personal and social circumstances, and in particular on grounds of sex. Article 35 guarantees the right to adequate remuneration "without, in any case, discrimination on grounds of sex being permissible".
Article 5 of Organic Law 3/2007 of 22 March on the effective equality of women and men (No. 2543/2007) (LOIEMH (No. 2543/2007)) expressly enshrines the principle of equal treatment and equal opportunities in relation to remuneration conditions.
Article 8 of the same LOIEMH (No. 2543/2007) provides that any unfavourable treatment of women related to pregnancy or maternity constitutes direct discrimination (not merely indirect discrimination) on grounds of sex.
In addition to the general provisions prohibiting all forms of discrimination under Articles 4.2.c and 17.1 of the Workers' Statute (ET) — the latter of which also renders discriminatory employer decisions null and void — and the specific provisions on professional classification (Article 22.4 ET), training (Article 23.2 ET) and promotion (Article 24.2 ET), Article 28.1 ET enshrines — and did so even prior to the reform introduced by Royal Decree Law 6/2019 (No. 3033/2019) — the right to equal pay for work of equal value: "The employer is obliged to pay the same remuneration, whether paid directly or indirectly, and regardless of its nature — whether salary or non-salary — for the performance of work of equal value, and no discrimination on grounds of sex shall be permitted in any of the elements or conditions of such remuneration".
At European level, Art. 157.1 of the Treaty on the Functioning of the European Union (TFEU) (No. 6/1957) requires each Member State to ensure the application of the principle of equal pay for male and female workers for equal work or work of equal value.
Initially, Council Directive 75/117/EEC of 10 February (No. 174/1975), on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women, extended the concept of equal pay to work of equal value — incorporating the provisions set out in International Labour Organization (ILO) Convention No. 100.
The reform introduced by Directive 2002/73/EC of the European Parliament and of the Council of 23 September (No. 11316/2002) amended the definitions of direct and indirect discrimination and facilitated their evidential application.
Under current secondary EU law, Directive 2006/54/EC of the European Parliament and of the Council of 5 July (No. 7671/2006), which consolidates the earlier provisions, establishes that for the same work or for work to which equal value is attributed, all direct and indirect discrimination on grounds of sex shall be eliminated in respect of all aspects and conditions of remuneration (Art. 4).
Furthermore, Art. 23 of the Charter of Fundamental Rights of the European Union (No. 12415/2007) (CFREU) provides that equality between women and men must be ensured in all areas, including employment, work, and pay.
The Court of Justice of the EU (CJEU) has consistently held that EU law precludes any national measure which, "even if it is worded in neutral terms, disadvantages a far greater proportion of women than men, unless that measure is justified by objective factors unrelated to any discrimination on grounds of sex" (CJEU judgment of 27 June 1990, Kowalska, C-33/89 (No. 2324/1990); 7 February 1991, Nimz, C-184/89 (No. 2899/1991); 4 June 1992, Bötel; etc.).
The Spanish Constitutional Court (TC) has adopted the definition of indirect discrimination in cases where there is a "formally neutral or non-discriminatory treatment which, owing to the different factual circumstances of male and female workers, produces an adverse impact on members of a particular sex" (STC 145/1991 (No. 1743-TC/1991), 286/1994 (No. 13042/1994), 147/1995 (No. 2607-TC/1995) and 198/1996 (No. 718/1997)).
The Constitutional Court also notes that the prohibition of discrimination on grounds of sex has its origins in "the determination to put an end to the historically subordinate position of women in social and legal life — most notably in the sphere of employment and working conditions — a situation that manifests itself in the specific difficulties women face in accessing work and advancing within it" (STC 128/1987 (No. 855-TC/1987), 19/1989 (No. 304/1989), 317/1994 (No. 13073/1994), 17/2003 (No. 793/2003), 214/2006 (No. 70567/2006), 324/2006 (No. 135437/2006) and 26/2011 (No. 6062/2011)).
With regard to ordinary case law, the ruling of the Social Chamber of the Supreme Court (STS) dated 12 May 2015 (No. 102267/2015), ordinary cassation appeal (RCO) No. 153/2014, examined the nullity of a clause in the collective bargaining agreement for large department stores which, for the purposes of promotion, took into account the number of effective hours worked per year without discounting interruptions in the provision of services lasting less than two months. On the basis that maternity leave and leave for risk during breastfeeding would exceed that threshold, the Court found that this apparently neutral clause produced a situation of discrimination against female workers.
This is the case with a salary supplement that ceases to be paid if justified absences exceed 30 calendar days, which means that all maternity leave results in the loss of the supplement (STS of 27 May 2015, RCO No. 103/2014 (No. 80149/2015)). In this regard, it should be noted that maternity leave cannot be equated with any other type of leave, such as temporary disability (IT), since the former is exclusive to women (see CJEU judgment of 4 October 2018, Dicu case, C-12/17 (No. 127996/2018)). The rule is therefore not neutral, as it affects women only, and discrimination accordingly arises from the failure to exempt the situation of maternity.
In the same vein, an analysis through a gender perspective led to a finding of discrimination in STS No. 10/2017, of 10 January 2017, RCO No. 283/2015 (No. 495/2017), concerning the company practice of counting maternity leave and leave for risk during pregnancy as absences for the purposes of calculating productive days entitling employees to various incentive payments.
Similarly, STS No. 43/2017, of 24 January 2017 (No. 5530/2017), doctrine-unification cassation appeal (RCUD) No. 1902/2015, interpreting broadly the CJEU judgment of 1 July 2010, Parviainen case, C-471/2008, held that the reduction in pay of a resident doctor who, as a result of a workplace adjustment during pregnancy and breastfeeding, ceased to perform medical on-call duties constituted direct discrimination on grounds of sex.
Finally, the very recent Supreme Court Ruling No. 589/2019, dated 16 July 2019, issued in collective proceedings No. 69/2018 (No. 131242/2019), aptly invoked by the claimant, found that the regulation of a salary supplement requiring a minimum number of hours worked in order to accrue entitlement — without making an exception for absences related to maternity — was discriminatory.
It can therefore be stated unequivocally that a pay supplement which takes into account time worked for the purposes of accrual, without counting periods of maternity-related absence, constitutes direct discrimination on grounds of sex. The same applies to any supplement where maternity-related absences may result in a reduction in pay.
At this point, it must be noted that the company should have assessed the claimant's performance during the 2017/2018 financial year using qualitative rather than quantitative criteria, so that her absence would not affect the assessment. On the basis of that assessment, the company should then have proceeded to award the bonus and the salary increase.
And if, as the company argues, the assessment was impossible or excessively complex due to the claimant's extended absence, the only way to avoid discrimination would have been to award both at the same level as in the previous financial year, 2016/2017.
We must therefore uphold the claim and accept the claimant's submissions under the various forms of relief provided for in Article 182.1 of the LRJS (No. 19110/2011), which are set out in the claim in a systematic and structured manner as separate heads of claim.
Equality between women and men is a fundamental objective of our labour law framework. Although it is formally uncontested, its practical effectiveness remains stubbornly elusive.
An Equality Plan is worthless if discriminatory criteria continue to be applied.
The gender pay gap is a statistically verifiable reality that persists despite universal calls for its elimination. Within it, the maternity pay gap is the most visible and deeply rooted, being inherent in the biological circumstances of women.
It is surprising that the company failed to identify the discriminatory conduct now before the court.
THIRD.– The full upholding of the claim gives rise to the following findings:
A.– A declaration that the denial to the claimant of the bonus for the 2017/2018 financial year and of the salary increase in October 2018 constitutes discrimination on grounds of sex.
B.- An order requiring the company to cease the discriminatory conduct immediately.
C.- An order requiring the company to remedy the effects of the fundamental rights violation by paying the claimant 7,980 euros gross as a bonus for the 2017/2018 financial year (the same amount awarded for the 2016/2017 financial year), and by increasing her salary, with effect from 1 October 2018, by 1.01% (the same increase applied on 1 October 2017), without prejudice to any subsequent increases.
In both cases, together with the corresponding default interest at the rate of 10% per annum (Article 29.3 of the Workers' Statute).
D.- An order requiring the company to pay compensation.
In this regard, the amount of 25,001 euros sought in the claim is considered appropriate, applying on a guideline basis the amounts set out in the Spanish Law on Infringements and Sanctions in the Social Order (LISOS), as accepted by the most authoritative case law (STS No. 329/2016 of 26 April 2016, RCO No. 113/2015 (No. 47173/2016); STS No. 440/2016 of 18 May 2016, RCO No. 150/2015 (No. 71234/2016); STS No. 43/2017 of 24 January 2017, RCUD No. 1902/2015 (No. 5530/2017); STS No. 102/2017 of 3 February 2017, RCO No. 39/2016 (No. 6391/2017); STS No. 768/2017 of 5 October 2017 (No. 158915/2017); RCUD No. 2497/2015; and STS No. 61/2018 of 25 January 2018, RCO No. 30/2017 (No. 1991/2018)).
In response to the company's submissions on this point, it must be noted that this dispute has necessarily entailed costs for the claimant, as well as considerable anxiety, having been compelled to bring legal proceedings against the person who remains her employer and upon whom her livelihood depends, thereby placing her professional future at risk.
Furthermore, as already noted, it is striking that at this stage the company had still not recognised the discriminatory nature of its approach — and even more so that, upon receiving the founding claim in these proceedings, which sets out the grounds in full, it neither reconsidered its position nor retracted.
Finally, regard must also be had to the preventive purpose that the corresponding compensation must serve (Article 183.2 of the LRJS (No. 19110/2011)).
FOURTH.- pursuant to the provisions of Article 191 of the LRJS (No. 19110/2011), the appeal available against this ruling is the appeal on points of law (suplicación), of which the parties will be duly notified.
Having regard to the articles cited above and all other provisions of general and relevant application,
RULING
Upholding in full the claim that gave rise to these proceedings, brought by Ms Lucía against company XXXXXXXX, with the participation of the PUBLIC PROSECUTOR'S OFFICE, concerning the protection of fundamental rights, I HEREBY ORDER:
1. I declare that the company has infringed the claimant's fundamental right not to suffer discrimination on grounds of sex, by deciding not to pay her the bonus for the 2017/2018 financial year and not to increase her salary on 1 October 2018.
2. I order company XXXXXXXX to immediately cease its discriminatory conduct.
3. I order company XXXXXXXX to pay the claimant a gross sum of €7,980 in respect of the bonus for the 2017/2018 financial year, and to increase her salary by 1.01%, with effect from 1 October 2018, without prejudice to any subsequent increases, together with default interest at the rate of 10% per annum (pursuant to Article 29.3 of the Workers' Statute).
4. I order company XXXXXXXX to pay the claimant compensation of €25,001.
This judgment shall be notified to the parties, who are hereby informed that an appeal may be lodged against it before the Labour Chamber of the High Court of Justice of Catalonia, by giving notice to this Court either in person or in writing within five working days of notification of this ruling. Any party that is not an employee and does not benefit from legal aid must, at the time of giving such notice, demonstrate that the full amount of the award has been deposited in this Court's deposits and consignments account, or provide a joint and several guarantee from a financial institution for the same amount; an additional deposit of €300 is also required. Failure to meet these requirements will result in the appeal being inadmissible.
This is my ruling, which I pronounce, order and sign.
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