Retirement at 65 non-discriminatory: EU Court
Jobless
By Leo Gasteen
The European Court of Justice (ECJ) has ruled that Germany's law on forced retirement at 65 is fair and does not go against the EU's directive for equal treatment.
In Germany, the Law on equal treatment (Allgemeines Gleichbehandlungsgesetz) provides that clauses on automatic termination of employment contracts on the ground that an employee has reached retirement age may escape the prohibition on discrimination on grounds of age. Under the German legislation, the power to adopt such clauses may be entrusted to the social partners and implemented by a collective agreement.
The ECJ found, first, that a clause on automatic termination of an employment contract on the ground that an employee is eligible to retire creates a difference of treatment based directly on age.
In regards to the aspect of difference of treatment, the ECJ considered that such a measure does not establish a regime of compulsory retirement but allows employers and employees to agree, by individual or collective agreements, on a means, other than resignation or dismissal, of ending employment relationships on the basis of the age of eligibility for a retirement pension.
As regards the aim of the legislation at issue, the ECJ observed that the mechanism is based on the balance to be struck between political, economic, social, demographic and/or budgetary considerations and the choice to be made between prolonging people’s working lives or, conversely, providing for their early retirement.
The ECJ concluded that such clauses on automatic termination have been part of the employment law of many Member States for a long time and are in widespread use in employment relationships. By guaranteeing workers a certain stability of employment and, in the long term, the promise of foreseeable retirement, while offering employers a certain flexibility in the management of their staff, the clause on automatic termination of employment contracts is thus the reflection of a balance between diverging but legitimate interests, against a complex background of employment relationships closely linked to political choices in the area of retirement and employment. Those aims must, in principle, be considered to justify ‘objectively and reasonably’, ‘within the context of national law’, as provided in Directive 2000/78, a difference in treatment on the ground of age prescribed by Member States.
Background
Gisela Rosenbladt worked as a cleaner for 39 years. Her employment contract, in accordance with the collective agreement for the commercial cleaning sector, ends at the end of the calendar month in which she may claim a retirement pension, or, at the latest, at the end of the month in which she reaches the age of 65. When she reached the age of 65, which was retirement age, her employer gave her notice of the termination of her employment contract. Ms Rosenbladt brought an action before the Arbeitsgericht Hamburg (Hamburg Labor Court), claiming that the termination of her employment contract constituted discrimination on grounds of age.
The referring court asked, essentially, whether the automatic termination of an employment contract at normal retirement age is consistent with the prohibition on discrimination on grounds of age laid down by Directive 2000/78/EC
European Court of Justice - Justice and Application -Case C 45/09 Full Text