In a prior post in our German Workplace Harassment series, we discussed possible measures and sanctions employers may take against harassers in their company and some relevant court rulings. Today we would like to examine the question of compensation for harassment from the perspective of the victim.

Discrimination in the workplace can take many forms, for example on the basis of gender, age or nationality. The legislator protects employees primarily with a claim for damages and compensation in the event of discrimination including harassment. Employees are entitled to compensation (see Section 15 (1) Equal Treatment Act) if they have suffered material damage as a result of harassment caused intentionally or negligently by the employer. In addition to this claim for damages, the affected employee can also assert a claim for compensation for non-material damage. According to Section 15 (2), the employee is entitled to “compensation for pain and suffering” for the discrimination suffered, even if they have not suffered any financial loss or are unable to quantify such loss. In contrast to a claim for damages, no fault on the part of the employer is required. This means that as soon as discrimination is established in accordance with the above principles, a potential claim for compensation exists.

The Act only requires that victims of workplace harassment should receive “appropriate compensation“, but for the most part does not provide concrete amounts, guidelines or any other basis for calculation. The final compensation will usually depend in particular on the type and severity of the discrimination, the frequency and consequences of the discrimination and the extent of any fault on the part of the employer (both in terms of actual culpability and the absence or insufficiency of steps taken to prevent that sort of conduct), and will also take the economic capacity of the employer into account. The amount of compensation is generally unlimited and in theory serves as a deterrent for the employer against further discrimination.

However, there are very few reported cases in Germany where employees have successfully sued for compensation for harassment, which makes it difficult to assess what sort of compensation number is likely to be granted. Reasons for this lack of case law most likely are (i) that parties very often agree on a settlement to avoid publicity, conclude the matter quickly and comparatively easily, avoid damage to reputation, etc.) and (ii) many employees simply fail to file their payment lawsuits in time (this can be seen in many of the court decisions denying the claim).

Important: Section 15 (4) Equal Treatment Act lays down a strict deadline of two months for asserting claims. Within this period, the employee must assert a claim for damages and/or compensation in writing to the employer or alternatively directly via lawsuit at the Labour Court. In the case of a job application or thwarted career advancement, the deadline begins with the rejection, and in all other cases at the time when the employee becomes aware of the discrimination.

For a better insight, we have noted some court decisions on this topic below:

In 2015, the Labour Court Weiden (16.09.2015 – 3 Ca 1739/14) granted potential future damages as well as compensation in the amount of EUR 2,500 to the plaintiff due to sexual harassment in the form of unsolicited physical contact by sliding onto the couch closer to the victim, a grip on the thigh and a hug from behind. The plaintiff was employed for a 1-year fixed-term with a mini-job (EUR 400/ months) as assistant of the managing director. From the beginning of the employment relationship, the superior had repeatedly summoned the plaintiff to the couch in his office and had slid close to her there. He also repeatedly tried to touch her in other ways, including by stroking her shoulder and putting his arm around her waist. Finally, the supervisor suddenly approached the plaintiff from behind in the office when she had to pull a folder out of the filing cabinet and grabbed her breasts with both hands from behind. The plaintiff became distressed and went home, did not return to work and was unable to work for the remaining 10 months of her fixed-term. The statements of the line manager in particular led the Court to conclude that he was trivialising and/or suppressing his misconduct towards the female. However, not only was the superior responsible, but also the employer, as it had failed to take appropriate measures against the discrimination and to protect the plaintiff as the person affected. The employer was therefore ordered to fully repay the entire outstanding salary until the end of the fixed-term employment as well as compensate the plaintiff for all future damages resulting from her exposure to sexual harassment, such as the costs of any medical treatment potentially necessary in the future, future lost remuneration, etc. She also received compensation of € 2,500 for pain and suffering, which the former superior and the employer must jointly pay her to help make up for the harassment she suffered.

In 2009, the Federal Labour Court (24.09.2009 – 8 AZR 705/08) addressed a case where some employees, who held both German and Turkish citizenship, sought compensation for discrimination. The plaintiffs alleged hostile work conditions due to xenophobic graffiti in the workplace toilets and argued that the graffiti created a discriminatory environment. The lawsuits were unsuccessful in all instances. Although the graffiti potentially constituted unlawful harassment of the plaintiffs due to their ethnic origin, according to the Court, it was unable to decide whether the graffiti actually created a hostile environment for them due to conflicting evidence as to when the branch manager was informed about it and his subsequent reaction to it. Ultimately, according to the Court, the claims failed because the plaintiffs had not asserted their claims for compensation in writing within the two-month preclusion period. Nonetheless, it is clear that if the employer had not taken prompt steps to remove offensive and discriminatory graffiti once made aware of it, a claim asserted in good time could well have succeeded.

Even though there is not a lot of precedent on successful compensation claims by employees based on harassment, this does not mean employers are on the safe side with this in Germany or that they should not fear high compensation amounts if a case of harassment in their company succeeds. The lack of case law decisions regarding the calculation and amount of the compensation makes this a very uncertain and unpredictable factor. From claims in discrimination cases other than harassment it can be seen that German Labour Courts – if they decide compensation must be paid – tend to grant something close to the amount the plaintiff asked for. In Germany the concept of compensation for immaterial damages has not been so clearly established as in other countries and plaintiffs so far have been rather cautious and reluctant in demanding higher amounts. However, it must be assumed that this will change in the future (in particular with the increasing visibility of injured-feelings compensation amounts from other countries). Further, as already mentioned above, many compensation payments are agreed on via settlement agreements inside or outside the Court and just never get known to the public (due to strong non-disclosure agreements). Where reputations and careers are at stake there is every reason to believe that such compensation agreements can get well into the six-figure range depending on the case.

This said, it must be emphasised once again that it is not a solution for employers in Germany either not to act on suspicions or complaints of harassment in the workplace if compliance is taken as a priority and, above all, if they have committed themselves to a zero-tolerance policy. Promising to go above and beyond your basic duties of care and then falling short even of the minimum statutory obligations is probably an even worse look than just trying to comply with all legal requirements. In addition, the obligation of every employer to investigate a complaint and to inform the employee making the complaint of the outcome arises directly from Section 13 Equal Treatment Act. If the employer does not fulfil its organisational and protection obligations under the Act or does not do so properly, the burden of proof may shift to its disadvantage in proceedings for damages. In addition, a new justification in Court may be ruled out if, for example, a previous complaint was not handled properly. The works council can also sue in court to procure compliance with the organisational and procedural regulations around the handling of harassment allegations and findings.