Pay Transparency and the Prohibition of Detrimental Action: Lessons from Recent Case Law
Pay Transparency and the Prohibition of Detrimental Action: Lessons from Recent Case Law
Under Dutch law, employers are not allowed to discriminate based on gender. They also may not disadvantage employees who report unequal treatment. A recent ruling by the Amsterdam Court of Appeal emphasizes that this prohibition of detrimental action is not without obligation.
With the upcoming EU Pay Transparency Directive, which must be transposed into Dutch law by 7 June 2026, the importance of pay transparency will only increase. Under this directive, employers will face:
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What happened?
A female employee with a one-year contract at a digital marketing company received an offer to extend her contract. Shortly thereafter, she confronted her manager about the fact that a male colleague in a similar role was earning significantly more. During conversations with HR and her manager, she expressed that she perceived this as gender-based unequal treatment. A few days later, the employer withdrew the extension offer.What did the court decide?
The court ruled that the employer acted with serious culpability. According to the court, the withdrawal of the contract extension was a direct consequence of the report of unequal treatment. This violated the prohibition of detrimental action. The court found that the employee had been performing adequately before the report and that there was no other reason not to renew her contract. The employment relationship only became strained after she voiced her concerns. The court therefore awarded her a fair compensation of €46,730.80 gross.What does this mean for employers?
This ruling underscores the importance of a transparent and objective pay policy. Reports of unequal treatment must be taken seriously and may not result in adverse consequences for the employee.With the upcoming EU Pay Transparency Directive, which must be transposed into Dutch law by 7 June 2026, the importance of pay transparency will only increase. Under this directive, employers will face:
- New transparency obligations regarding pay for applicants and employees
- The use of pay structures based on objective, gender-neutral criteria
- External reporting obligations on pay gaps (for companies with 100+ employees)
Get started and be well-prepared
Our whitepaper explains the directive in detail, outlines steps you can already take, and shows how to leverage this change as a strategic advantage. Download the whitepaper and prepare your organization for the future:Download
