Directive (EU) 2023/970 introduces new employee protection and new employer obligations on equal pay and transparency. The Directive requires Member States to adapt their local legislation, promoting (and even imposing) wage transparency including in relation to private employment relationships.
The same obligations will apply to employers with between 150 and 249 workers, who will be required to provide the information by 7 June 2027 and every three years thereafter. Employers with between 100 and 149 workers will have until 7 June 2031 and every three years thereafter.
THE EFFECTS OF THE IMPLEMENTATION OF THE DIRECTIVE IN ITALY
In our country, as pointed out, implementing the provisions of the Directive will certainly impact employment law: firstly, it will be necessary to amend existing regulations, such as, for example, those relating to the timing and manner of notifying the National Labour Inspectorate (Ispettorato Nazionale del Lavoro) and other supervisory bodies.
Collective agreements are also likely to be affected by the implementation of the directive, with the probable introduction of some specific mechanisms for consultation and communication with trade union stakeholders, through a mechanism that is already tried and tested, as it already exists for employment and company performance data.
It is also highly likely that implementation of the Directive will require a mechanism to be established through national legislation for monitoring and, where appropriate, sanctioning breaches of the new obligations. In line with the Directive’s preamble, moreover, equality bodies will play a major role in both supervision and the application of sanctions. With regard to the latter, the possibility for equality bodies to act as employee representatives would contribute to improving the effectiveness and economic sustainability of the protection of the rights of stakeholders.
The introduction of the new legislation will add to and expand the scope of existing protections. An example of this is Italian Legislative Decree no. 198/2006 (the so-called Equal Opportunities Code), which already contains rules on equal pay, which will be expanded and supplemented by the new legislation on the employer’s burden in the event of reporting of wage discrimination.
In this regard, the current wording of the Equal Opportunities Code currently includes a special mechanism for the allocation of the burden of proof in cases of alleged wage discrimination. This mechanism provides that the complainant bears a reduced burden of proof compared to the general rules for civil proceedings, while the employer is responsible for proving the absence of discrimination. The Directive would further extend this protection by explicitly introducing a concept of “reversal of the burden of proof”. Consequently, the employer will have to prove not only the absence of discrimination, but also that it has fulfilled all relevant regulatory obligations properly and timely. This would mean greater protection and guarantees for people who consider themselves victims of wage discrimination.
It is more difficult, on the other hand, to imagine that new heads of damage could emerge from the breach of the provisions implementing the legislation in question, since only the damage actually suffered by the injured party is compensable, in its various forms, and other heads of damage (such as the so-called punitive damages of Anglo-Saxon origin) have no place in our civil law system.
Finally, the implementing legislation will have the difficult task of answering a number of questions that have significant practical impact: what will happen in situations where there are no actual reference points for comparison, such as in the case of tasks assigned to a single employee? Will it be possible to rely on statistical data or will it be necessary to assess the situation in real time? What implications will the implementation of highly diversified remuneration policies have? How can employers protect the confidentiality of their remuneration policies while avoiding making this information known to competitors?
The legislator will have to take these issues into account in advance in order to effectively and safely manage the impact of the Directive and regulatory changes promoting gender equality, as they seem to represent a real regulatory revolution in this field.
Continue reading the full version published in Il Sole 24 Ore’s Guida al Lavoro.