In the coalition agreement of 2021, Germany’s Federal Government had already announced that it intended to “evaluate the General Equal Treatment Act, close protection gaps, improve legal protection and expand the scope of application.” On July 19, 2023, the Federal Anti-Discrimination Agency (FADA) published a position paper containing the most important reform proposals. This Insight discusses these proposals and their potential impact on employers.

Reform proposals

Extension and specification of the scope of application

Under the proposal made by the FADA, the current grounds of discrimination would be supplemented by further grounds. These include “nationality,” “language,” “gender identity,” and “chronic illness,” although these are already protected under the current law in the context of indirect discrimination. In addition, the proposals regarding “social status” and “responsibility for family care” are intended to expand the existing criteria in order to close existing gaps in protection. Clear definitions of terms would be desirable here.

Finally, the ground “age” would be replaced by “stage or period of life” (Lebensalter) and “race” by “racist attributions” (rassistische Zuschreibungen). This presumably would have a clarifying function only.

Furthermore, according to the position paper, the scope of application of the General Equal Treatment Act would be extended to freelancers and volunteers as well as interns.

Protection against discrimination through artificial intelligence

The FADA proposal also addresses the current issue of automated decision-making systems, better known as artificial intelligence (AI). The position paper proposes that action by automated decision-making systems should be included as an element of discrimination. However, it is unclear whether this should include any use of AI or only use that leads to a decision, and whether the use of AI in itself should be considered a disadvantage. The latter would be extremely far-reaching in view of the multitude of different AI systems and their possible uses and would amount to a blanket ban. Clarification is expected on this issue.

Better protection for people with disabilities

To improve the enforcement of rights for people with disabilities, the failure to take precautions to overcome barriers and enable equal participation would be considered discrimination. In addition, in case of such a failure, the existence of a disadvantage would be refutably deemed an indication of discrimination. An obligation to ensure that workplaces are barrier-free so far has been provided only in section 3a (2) of the German Workplaces Ordinance (Arbeitsstättenverordnung, ArbStättV) if employers employ persons with disabilities. The changed burden of proof rule would therefore be especially relevant in the initial phase of the employment relationship.

Elimination of privileges under church law

At present, under section 9 of the AGG, employers with confessional affiliations are subject to extensive exceptions from the requirements of the AGG: this provision would be deleted without substitution. However, the needs of employers with confessional affiliations would continue to be taken into account within the framework of section 8 AGG at the level of justification.

Strengthening the protection against age discrimination

The current option of setting minimum and maximum age requirements for employees would be removed. This is likely to be especially relevant for public employers, as corresponding age limits are particularly relevant when it comes to tenured positions. However, age limits have so far also been recognized in jobs with special physical requirements (e.g., pilots).

Extended period for asserting rights

The time period for asserting claims for discrimination is currently two months from the date on which the claim arose. This would be extended to 12 months. The proposed extension is intended to close gaps in protection for persons who have knowledge of the facts but are not aware of the rights themselves and to provide more time for the amicable settlement of claims.

Simplified proof of discrimination

Currently, an affected person must fully prove the discrimination, i.e., that they have been treated less favorably than another comparable person. Under the FADA proposal, prima facie evidence would suffice in the future.

In addition, standard examples of presumed disadvantage would be included to facilitate the shifting of the burden of proof. These include testing, the failure of the employer to establish a complaints office, or statements by the affected persons. The latter is particularly extensive and raises the question of how to distinguish this rule example from mere assertion. This is likely to remain an important issue in further discussion leading up to the implementation of the AGG reform. Finally, a right to information from the discriminating party would be created.

Compensation

Court-ordered compensation payments for discrimination are relatively low, especially in comparison to awards in the United States. The FADA therefore demands a clarifying addition that sanctions for discrimination must be effective, proportionate and dissuasive. However, this does not in fact automatically lead to an increase in compensation. This would first have to be realized through judicial practice.

Extension of the options for legal protection

In existing employment relationships there is still a degree of restraint as far as individual enforcement of rights is concerned. The FADA proposal therefore provides for four instruments to facilitate access to legal protection for the persons affected. In addition to a right of associations to take legal action and the possibility of representative action for anti-discrimination associations, there is also a right of the Independent Federal Anti-Discrimination Commissioner to take legal action as well as the possibility of compulsory mediation if requested by the person affected.

Where does it go from here?

While a large number of the proposed amendments in the position paper are of a clarifying nature, others are very far-reaching. This especially applies to the rules on the burden of proof. So far, it is only a non-binding position paper. With it, however, the FADA has laid a foundation that will guide further discussion. The proposals are already facing considerable opposition from the FDP, the party of the current Federal Minister of Justice. There are no concrete plans to table a bill. It is therefore unlikely that the planned reform will be implemented in the near future. However, non-discriminatory and inclusive design of the workplace already has immeasurable value for the social responsibility and attractiveness of a company. Irrespective of the legal basis, a precise examination of the operational conditions and structures is worthwhile.