General Equal Treatment Act (AGG)

Basics and objectives

The General Equal Treatment Act came into force on August 18, 2006 as a comprehensive codification of German anti-discrimination law and transposes several European directives on equal treatment into national law. The central objective of the Act is to prevent and eliminate discrimination on the grounds of race, ethnic origin, gender, religion or belief, disability, age or sexual identity. The Act establishes comprehensive protection against discrimination both in employment law and in general civil law transactions, whereby the practical significance lies particularly in the area of employment law. The provisions of the AGG have led to a fundamental change in corporate culture and HR processes, as employers must now take active preventative measures. The case law of the Federal Labor Court and the European Court of Justice has significantly shaped the interpretation of the AGG and contributed to the continuous development of protection against discrimination. The preventative effect of the law is reflected in the increasing awareness of discrimination issues and the development of corresponding compliance structures in companies. The easing of the burden of proof in favor of those affected has significantly improved the practical enforcement of discrimination claims. The sanctions for violations can have considerable financial consequences for companies and include claims for compensation as well as damages. The international dimension of protection against discrimination is gaining in importance due to the increasing globalization of the economy. Social developments and new forms of discrimination require continuous adaptation and further development of the legal framework. The digitalization of the world of work places new demands on the protection against discrimination, particularly with regard to algorithm-based decision-making systems.

Scope of application and protected features

The AGG extends its scope of protection to all phases of the employment relationship, starting with the job advertisement, through the application and recruitment process, to the termination of the employment relationship and beyond. The protected characteristics have been conclusively defined by the legislator and, in addition to the classic grounds of discrimination such as gender and ethnic origin, also include more modern dimensions of protection such as sexual identity or age. The application of the law in general civil law transactions focuses on mass transactions and private law insurance, whereby there are special justifications for different treatment. Indirect discrimination is a form of discrimination that is particularly relevant in practice if apparently neutral regulations or criteria can put certain groups of people at a particular disadvantage. Multiple discrimination as a combination of different grounds of discrimination is becoming increasingly important in case law and requires particularly careful examination. The operational scope of application extends to all employees within the meaning of Section 6 AGG, including temporary workers and employee-like persons. The scope of protection against discrimination is continuously being specified and extended by European case law, which presents national courts with new questions of interpretation. The distinction between permissible unequal treatment and prohibited discrimination requires a careful case-by-case examination, taking into account the grounds for justification. Positive measures to promote disadvantaged groups are expressly permitted and are increasingly being used in practice as an instrument of personnel development. Church employers enjoy special privileges in the selection of personnel due to their constitutionally protected right to self-determination. The development of new forms of work and employment models requires a dynamic interpretation of the personal scope of application.

Employer obligations and preventive measures

The AGG obliges employers to take comprehensive organizational and preventive measures to actively prevent discrimination in the company and to create a discrimination-free working environment. The necessary protective measures include, in particular, informing employees about the legal regulations, setting up complaints offices and conducting regular training to raise awareness among employees and managers. The development of a company diversity management system has established itself as an effective tool for implementing the AGG requirements and contributes to improving the corporate culture. Personnel selection procedures must be designed to be non-discriminatory, starting with the formulation of job advertisements and extending throughout the entire recruitment process. The documentation of all personnel measures is becoming increasingly important, as it serves as proof of the legality of decisions in the event of a dispute. The involvement of the works council in the development and implementation of anti-discrimination measures is required by law and is indispensable in practice. The establishment of effective complaints management requires clear responsibilities and transparent procedures that all employees must be aware of. The integration of AGG compliance into existing management systems has proven to be particularly effective and enables a systematic review of measures. The use of artificial intelligence and algorithmic systems in HR work requires special precautions to prevent systematic discrimination. The regular review and updating of preventive measures is necessary in order to be able to react to new developments and findings. The costs of implementing and maintaining the necessary measures must be borne by the employer and represent a necessary investment in legal certainty. The increasing internationalization of the world of work requires cultural differences to be taken into account when designing prevention measures.

Legal consequences and sanctions

Violations of the AGG can have far-reaching legal and financial consequences for employers, whereby the law provides for a differentiated system of legal consequences. The claim for damages under Section 15 (1) AGG covers the material damage caused by the discrimination, while the compensation under Section 15 (2) AGG compensates for non-material damage and has a preventative character. According to case law, the amount of compensation must have a deterrent effect and can amount to several months’ salary in the event of serious violations, with the upper limit being continuously specified by case law. The lighter burden of proof in favor of those affected means that they only have to provide evidence of discrimination, while the employer has to provide full proof that there was no discrimination. The short deadline of two months for asserting claims requires swift action by those affected and careful monitoring of deadlines by legal advisors. The prohibition of discrimination protects employees from being discriminated against for exercising their rights under the AGG and strengthens the practical effectiveness of the law. Employer liability for discrimination by employees or third parties presupposes that the employer has taken no or inadequate preventive measures. The consequences of discrimination under collective law can manifest themselves in claims for injunctive relief by works councils or trade unions. The criminal law dimension of discrimination is becoming increasingly important, especially in serious cases of harassment or bullying. The reputational damage caused by publicized cases of discrimination can significantly exceed the direct financial consequences. The procedural enforcement of AGG claims takes place before the labour courts and requires specialized legal representation. The documentation of all personnel measures is of central importance with regard to possible legal disputes.

Special features in civil law transactions

The application of the AGG in general civil law transactions follows its own rules and primarily extends to mass transactions and private law insurance policies, whereby the practical significance is clearly less important than the scope of application under employment law. The definition of mass transactions includes contracts that are typically concluded on comparable terms in a large number of cases without regard to the person, such as retail transactions, visits to restaurants or transportation contracts. The letting of residential property is subject to special regulations which, on the one hand, are intended to ensure protection against discrimination but, on the other hand, also recognize the socially balanced composition of the resident population as a legitimate objective. The possibilities for justifying differences in treatment are broader in civil law than in employment law and allow for appropriate consideration of objective reasons. The lighter burden of proof also applies in civil law and makes it considerably easier to enforce discrimination claims. In addition to claims for damages and compensation, the legal consequences of a finding of discrimination also include an obligation to enter into a contract, which obliges the employee to enter into the denied contract. The role of anti-discrimination associations as representatives of the interests of those affected has been strengthened through advisory and litigation powers. The increasing digitalization of business transactions is placing new demands on the protection against discrimination, particularly in the case of algorithm-based decision-making systems in online commerce. The distinction between permissible differentiation and prohibited discrimination requires a careful case-by-case examination, taking into account the economic interests of the providers. The international dimension of protection against discrimination under civil law is becoming increasingly important due to cross-border business relationships and online trading. The development of new business models and forms of distribution requires continuous adaptation of the legal assessment. The documentation of business practices and selection decisions is also becoming increasingly important in civil law transactions.

Procedural law and legal protection

The procedural enforcement of AGG claims follows different procedural rules depending on the area of application, with the jurisdiction of the labor courts in labor law and the ordinary courts in general civil law. The burden of proof facilitated by Section 22 AGG is the central procedural instrument for effective legal enforcement, as it only requires those affected to present evidence that suggests discrimination. Support from anti-discrimination associations can take the form of legal advice, legal representation or assistance, which is of great practical importance, especially for financially weaker victims. The short deadline for asserting claims of just two months requires swift action on the part of those affected and professional legal advice in advance of possible legal action. The preservation of evidence through systematic documentation of all relevant processes is of central importance for both sides in view of the special distribution of the burden of proof. The possibility of collective action extends legal protection beyond the individual case and enables strategic litigation to enforce fundamental legal issues. The cost risks of litigation can be mitigated by legal aid or support from associations, but remain a relevant factor when deciding whether to take legal action. Alternative dispute resolution through mediation or conciliation is becoming increasingly important in practice and can contribute to the amicable resolution of discrimination conflicts. The role of the Federal Anti-Discrimination Agency as a central point of contact for those affected and as a mediation body has been strengthened by case law. The international dimension of legal protection is guaranteed by the possibility of referral to the ECJ and the consideration of European case law. The increasing digitalization of the justice system opens up new possibilities for legal action, but also requires special skills from all parties involved. The development of case law on class actions could open up new perspectives for the collective enforcement of AGG claims in the future.

Future prospects and development trends

The further development of the AGG faces significant challenges due to the advancing digitalization of the world of work and new forms of discrimination, which manifest themselves in particular in the context of artificial intelligence and algorithmic decision-making systems. The increasing importance of diversity management and inclusion in companies is leading to a more proactive approach to anti-discrimination that goes beyond mere compliance with the law and incorporates strategic corporate objectives. The European dimension of protection against discrimination is becoming increasingly important due to new directives and the case law of the European Court of Justice, whereby the harmonization of protection standards in particular is being driven forward. The integration of new grounds of discrimination, such as social origin or digital participation, is increasingly being addressed in legal policy discussions and could lead to an expansion of the legal scope of protection. The development of preventative compliance systems to avoid discrimination is being driven by technological innovations and new management approaches, whereby the effectiveness of these systems must be continuously evaluated. The significance of intersectional discrimination, i.e. the interaction of different discrimination characteristics, requires new legal and practical approaches to effectively combat complex forms of discrimination. The globalization of the world of work and international corporate structures place new demands on the protection against discrimination in the workplace and require greater international coordination. The role of anti-discrimination associations and civil society organizations is being strengthened by new forms of networking and digital activism, which contributes to more effective representation of the interests of those affected. The development of case law on class actions and collective legal protection instruments could fundamentally change the enforcement of AGG claims. The increasing social awareness of discrimination issues leads to higher demands on companies and institutions with regard to their anti-discrimination measures. The integration of AGG compliance into digital transformation processes is becoming a key challenge for companies, requiring both legal and technical expertise. The importance of empirical research and data collection on the effectiveness of anti-discrimination measures is increasing and enables evidence-based further development of the legal framework.