Freezing the better-paid group closes a 15 per cent pay gap in six years. Article 10 gives you six months.

The first remediation plan most finance functions look at is a freeze. The pay gap in a value group is 12 per cent, the better-paid group stops receiving increases, the underpaid group continues to receive them, and the gap closes on its own without a single dedicated euro. Presented that way it looks like the responsible option: no windfall, no admission, no budget line.

It does not work, and the reason is not primarily legal. It is that the mechanism is slower than the deadline it is meant to meet. The legal problems then make the remaining case worse.

1. What Article 10 actually asks you to remove

The 5 per cent figure is a trigger, not a target. Article 10(1) makes a joint pay assessment compulsory only when three conditions are met together: the reporting shows a difference in average pay of at least 5 per cent in a category of workers, the employer has not justified that difference on the basis of objective, gender-neutral criteria, and the employer has not remedied the unjustified difference within six months of the date of the pay reporting.

Read in order, those conditions describe two exits. An employer facing a 5 per cent difference can justify it, or can remedy it inside six months. Only if neither happens does the joint pay assessment with workers' representatives follow.

The substantive duty sits elsewhere and is wider. Article 9(10) requires employers to remedy gender pay differences that are not justified by objective, gender-neutral criteria within a reasonable period, in close cooperation with workers' representatives, the labour inspectorate and/or the equality body. Article 10(2) and 10(4) speak throughout of unjustified pay differences, never of a line at 5 per cent. The individual right to equal pay, which Article 4(1) requires pay structures to guarantee and Article 16 backs with compensation, has no threshold whatsoever.

This matters for how a remediation plan is specified. A plan whose objective is "get the reported figure below 5 per cent" is aimed at the trigger. An employer who reduces an unexplained 8 per cent difference to 4.9 per cent has left 4.9 per cent unexplained. Whether that satisfies Article 10(1)(c) is not settled in the text, and there is no Court of Justice ruling or Commission guidance on the point. The cautious reading, and the one that survives an Article 7 information request, is that a difference is remedied when it is no longer unjustified.

2. The arithmetic decides this before the law does

Set the law aside for a moment and run the mechanism. A freeze closes a gap through the ratio of two pay levels, one rising and one held still. Where the better-paid level receives nothing and the underpaid level receives the standard annual round, the closing speed is fixed by the size of that round.

At a 3 per cent round, a single pay round closes a gap of 2.9 per cent and no more. Article 10 is triggered at 5 per cent. A freeze therefore cannot, on its own, remove a gap that triggered Article 10 in one round, at any gap size, before the arithmetic even reaches the six-month question.

The six-month window in Article 10(1)(c) runs from the date of the pay reporting, not from the employer's remuneration calendar. Even a gap small enough to be closed by two rounds needs those rounds to fall inside that window, which for most employers running one annual review they do not.

Change the assumptions and the conclusion holds. A 4 per cent round closes 3.8 per cent in one pass. A 5 per cent round closes 4.8 per cent. To clear a 5 per cent gap in a single round, the underpaid group would need an increase of 5.3 per cent while the rest of the organisation receives nothing, which is not a freeze. It is a targeted correction with a freeze attached.

3. What the Court of Justice decided about levelling down

The Directive is silent on whether equality should be restored upwards or downwards. A search of the full text for reduction, restraint or levelling returns nothing. The case law is not silent.

In Case C-408/92, Smith and others v Avdel Systems Ltd, decided on 28 September 1994, the Court addressed an employer that had equalised occupational pension ages by raising the women's pensionable age to the men's. Three passages are usually read together.

Paragraph 17: once discrimination in pay has been found, and for as long as the scheme has not adopted measures restoring equal treatment, compliance can be ensured only by granting the disadvantaged group the same advantages as the favoured group. In plain terms, until the structure is fixed, the remedy is upwards.

Paragraph 21: for periods of service after rules eliminating the discrimination have entered into force, measures that restore equal treatment by reducing the advantages of the previously favoured persons are not contrary to the equal pay provision, which requires the same pay for the same work without prescribing any particular level.

Paragraph 26: where an employer achieves equality for the future by restricting the advantages of the favoured group, equality may not be established progressively under conditions that mean the discrimination continues, even temporarily.

Paragraph 21 is the passage a freeze is usually defended with, and read alone it appears to help. It does not survive paragraph 26. Levelling down is permitted prospectively, after the discriminatory arrangement has been removed. A freeze does the opposite: it leaves the difference in place and lets it decay over several years, which is progressive equalisation with the discrimination continuing throughout.

One qualification belongs in any use of this judgment. Avdel concerned pensionable ages in an occupational pension scheme, assessed against Article 119 of the EEC Treaty, the predecessor of Article 157 TFEU on which the Directive rests. Reading it across to a running salary difference is an inference from the reasoning, not a holding of the judgment. No ruling has yet applied it to a remediation plan under Directive (EU) 2023/970.

4. A freeze keyed to sex is a criterion that is sex

There is a second problem, and it is more direct. A freeze applied to everyone in the better-paid group applies to everyone in that group, including people paid below the average of the other group. The rule that decides whether an individual receives a pay increase is their sex.

Article 6(1) requires that the criteria used to determine pay levels and pay progression be objective and gender-neutral, and be made easily accessible to workers. A criterion that is sex fails that on its face. Article 3(1)(i) defines direct discrimination as less favourable treatment of a person on grounds of sex than another in a comparable situation. For the individual who is himself underpaid relative to his value group and receives no increase, that description fits.

Article 10(4) then closes the circle. Remedial measures implemented after a joint pay assessment must include an analysis of, or the establishment of, gender-neutral job evaluation and classification systems so that direct and indirect pay discrimination is excluded. A measure that is itself a rule by sex cannot deliver that.

5. "Cost-neutral" describes the budget, not the exposure

A freeze does save the cost of the increase. It does not save anything else, and the largest item it does not save is the one that grows while the plan runs.

Article 16(3) requires that compensation for a worker who has suffered pay discrimination include full recovery of back pay and related bonuses or payments in kind, compensation for lost opportunities and non-material damage, and interest on arrears. Article 16(4) adds that it may not be limited by a prior upper limit. Every month in which an unjustified difference persists is a month of accrual for every affected worker in the group, and the freeze is a plan to let it persist for between two and ten years.

In Germany, the exposure is not theoretical. In its judgment of 23 October 2025 (8 AZR 300/24) the Federal Labour Court held that a comparison with a single better-paid colleague of the other sex is enough to raise the presumption of pay discrimination, shifting to the employer the burden of showing that the difference is objectively and not gender-related. The case was referred back and the claimant has not won. The effect on the burden of proof stands, and it is not answered by a group average that is scheduled to improve.

6. What restraint can lawfully do

None of this makes pay restraint unlawful. It makes restraint unusable as the remedy.

A gender-neutral measure is a different instrument. Setting a target range for a value group from documented criteria, and giving smaller increases to everyone above that range regardless of sex until the structure realigns, is a structural measure of the kind paragraph 21 of Avdel contemplates. It is applied by position relative to a criterion, not by sex, so Article 6(1) is satisfied.

Three conditions travel with it. It cannot stand alone, because it does nothing for the underpaid worker whose position paragraph 17 addresses. It cannot be counted as the correction under Article 10(1)(c), because the unjustified difference remains until the underpaid are raised. And it is not cost-neutral, because the accrual under Article 16(3) continues while it runs.

7. Practical implications

1. Separate the explained part of the gap from the unexplained part before pricing anything. The correction is owed on the unexplained part. A plan sized against the headline gap is either too expensive or aimed at the wrong people.
2. Price the correction as a one-off uplift of the underpaid, per value group. This is the number the board needs, and in most mid-market groups it is a fraction of one per cent of total payroll, not the figure people fear before it is calculated.
3. Map the six-month window onto your remuneration calendar now. The window runs from the reporting date. If your annual review sits outside it, an off-cycle correction is the only instrument that meets Article 10(1)(c).
4. Remove any rule in a remediation model that applies by sex. That includes a freeze, a reduced increase, or a bonus applied to everyone of one sex. Article 6(1) and Article 10(4) both rule these out, and a flat payment to all women is not a clean remedy either. Back pay is owed to individuals who were underpaid.
5. Write down the justification for whatever remains. Under Article 18(2), where an employer has not met its transparency obligations, the burden of proof in a pay discrimination claim shifts. The written criteria are what carries it.
6. Treat restraint above a target range as a budget tool, not a compliance measure. It can fund the uplift. It cannot replace it, and it should never be described internally as the plan.
7. Do not wait for the German law to test the plan. Germany has published no ministerial draft. The equal pay duty, the existing claims under the General Equal Treatment Act and the 2025 Federal Labour Court decision on the single comparator are already in effect.

The attraction of the freeze is that it makes an equal pay problem look like a scheduling problem. It is not one. The difference between a remedy and a delay is whether the underpaid worker is paid correctly this year or in six years, and that is the question both Article 10 and the 1994 judgment are asking.