The Advocate of the Principle of Equality (Equality Body) of the Republic of Slovenia found that considering the absences of an employee when calculating the value of “business performance bonus”, paid to the employees at the end of the year (also known as year-end bonus or Christmas bonus), constitutes indirect discrimination based on gender, parenthood and health status contrary to Article 6(2) of the Slovenian Protection against Discrimination Act (PADA).
The decision comes from a complaint concerning a Slovenian company that connected the value of a worker’s year-end bonus to their workplace attendance. In agreement with its employees, a predefined sliding scale was used to calculate deductions based on absence from work due to all health-related reasons, maternity leave, paternity leave and unpaid leave.
After a thorough investigation, the Advocate found that – while the criteria were laid out as neutral in terms of personal circumstances and while they apply equally to all employees – the agreement put certain employees with specific personal circumstances which they have no control over (for example pregnancy in female employees or parenthood in male employees, illness or worsening of a particular medical condition or disease etc.) at a disadvantage. As a result of the agreement, employees such as women, parents, workers with medical conditions received a lower bonus compared to other employees without such personal grounds.
Consequently, the Advocate found the agreement to be discriminatory. As the Advocate cannot impose sanctions, it informed the labour inspectorate about its decision and proposed a minor offence procedure is carried out and a fine to be imposed against the company.
In its decision, the Advocate took into account the fact that the year-end bonus is defined as a constituent element of “pay”. Pay is a basic right stemming from the employment contract in line with the Article 31(1)(8) of the Slovenian Employment Relationship Act. The bonus constitutes remuneration for work performed, and as such falls under the term of “pay”, as referred to in Article 2(1)(3) of PADA.
From the perspective of European Union Law, the decision of the Advocate is relevant in light of the recast Directive 2006/54/EC on equal treatment of men and women in employment, which in Article 1(b) defines pay as a key area where equal treatment must be defined. Such practices disproportionally affect women. Namely, in Slovenia, the share of fathers who exercise their right to parental leave is between 6-7%, in all other cases it is the mother that takes full parental leave.
In addition to gender discrimination, the Advocate also found health status discrimination. This is possible due to PADA which includes health status as a protected status in the field of employment. However, this personal ground is not absolutely prohibited; differential treatment is allowed if proportionality test is met. In this case, the proportionality test was not met, as the company did not demonstrate, nor did it argue, that it was pursuing a legitimate goal in setting out the bonus criteria, or that the means it used to achieve said goal were appropriate and essential.
The Advocate further specified that the business performance end-year bonus which is based on the total result of the annual performance of the company has to be distinguished from awarding work performance of an individual employee based on their effectiveness and work results. It also argued that the sole presence at the workplace does not necessarily reflect the worker’s performance.
The company nevertheless sought judicial review at the Administrative Court of the Republic of Slovenia. The latter confirmed the case of the Advocate in its entirety, with the judgment No. I U 29/2020-21 of 11 November 2020.
The case tackles a common practice among Slovenian companies. Other similar cases are already being deliberated by the Advocate.