Ratified treaties;¹ Non ratified treaties²

Discrimination on the grounds of sex/ Indirect discrimination/ Legislation obliging the employer to contribute to cash benefits payable during maternity leave/ The right to occupational freedom must be read together with the Basic Law’s provisions on gender equality/ Necessity to eliminate discrimination in practice/ Use of international law as a guide for interpreting domestic law/ Reference to international law to strengthen a decision based on domestic law

The German legislation provides that women on maternity leave are entitled to receive maternity benefits out of public funds (health insurance). In addition the employer is required to pay to women concerned the difference between the maternity benefit and the woman’s average wage. The amounts to be covered by the employer increased over time, due to increasing wages while the benefits paid by health insurance remained at the same level. In this regard, it has to be noticed that in order to ease the burden of small enterprises (up to 30 employees) a mandatory insurance scheme has been put in place, which covers the payments due from the employer’s side.³

A German company lodged a constitutional complaint alleging that the employer’s obligation to participate in the payment of cash benefits during maternity was in violation of the constitutional right to occupational freedom (Article 12(1) of the Basic Law).⁴

The Court held that, in principle, a sharing of the costs of maternity protection between the State and the employers was in accordance with the Constitution. However, the Court ruled that, in the present case, the arrangements made were unconstitutional because they violated the equality provisions of the Basic Law which provides in Article 3(2) as follows: “Men and women shall have equal rights. The state shall promote the actual implementation of equal rights for women and men and take steps to eliminate disadvantages that now exist.” The Court stated that these provisions aimed at the realization of equality in society and the implementation of gender equal in practice. According to the Court, this is in accordance with Germany’s international obligations, in particular those stemming from ILO Convention No. 111 on Discrimination (Employment and Occupation) and the Convention on the Elimination of All Forms of Discrimination against Women which both require the elimination of indirect discrimination and discrimination in practice. The Court considered that, according to these conventions, while the state has a wide margin of appreciation as to how to promote equality, discrimination in practice, as a consequence of any measures taken by the state, must be avoided.

The Court then observed that the increasing financial obligations of the employers in relation to maternity protection might restrict the employment opportunities of women. This position was backed up with a reference to Article 6(8) of ILO Convention No. 183 on Maternity Protection,⁵ not ratified by Germany, which, according to the Court, was based on the conviction that individual liability of employers for the payment of cash benefits can be an obstacle for employment of women. Accordingly the Court held that it was not necessary to determine the probability of payments of cash benefits alone being causal for non-employment of women.

The Constitutional Court of Germany thus held that an insurance scheme as the one in place for enterprises with less than 30 employees was an adequate measure to prevent indirect discrimination against women in the labour market, in accordance with Article 3(2) of the Basic Law. On the contrary, backing its reasoning on international law, the Court decided that as far as situation of enterprises with more than 30 employees is concerned, the impugned legislative provisions were held unconstitutional. The requirement that larger enterprises pay for the wage supplement themselves was found unconstitutional for violating the constitutionally guaranteed right to choose an occupation or profession.