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Justification for age discrimination

Posted on 13th September 2011
Case law

A European case has provided some guidance on when a contractual retirement age might be justified.

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Fuchs and another v Land Hessen C-159/10; C-160/10

Background

This case involved state prosecutors in Germany. The laws of Germany provide that civil servants retire at the end of the month in which they reach 65. If it is in the interests of the civil service and requested by the civil servant, retirement can be postponed in blocks of one year up to age 68. The law was introduced (apparently) on the basis that a 'person is unfit to work beyond ... 65'.

Mr Fuchs (F) and Mr Köhler (K) reached 65 in 2009. They each applied unsuccessfully to work for a further year and brought claims in the German courts. The court agreed that the compulsory retirement was discriminatory on grounds of age, but referred a number of questions to the ECJ.

The decision and comment

The ECJ's decision relates to whether a national law breaches the European principles of equal treatment and is not necessarily of direct relevance to employers seeking to establish justification of a retirement age within their organisation. However, there are a number of general points in the decision which employers could rely on:

1. All parties accepted that people can be fit to work beyond age 65 and that this 'justification' was no longer applicable. The ECJ commented that a particular law may be retained and be appropriate for reasons other than those which applied originally. For employers, this suggests that a requirement to retire based on one reason could be retained for another and does not necessarily become unlawful or discriminatory because the reason has changed.

2. The existence of a number of reasons for a retirement age 'does not preclude the existence of a legitimate aim'. In this case there were a number of factors relied on for the retention of the retirement age; they included:

a. the creation of a 'favourable age structure ... achieved by the simultaneous presence ... of young employees at the start of their careers and older employees at a more advanced stage' which promoted 'the exchange of experience';

b. 'efficient planning of the departure and recruitment of staff';

c. 'encouraging the recruitment and promotion of young people'; and

d. 'avoiding disputes relating to employees'.

Some or all of these are potential legitimate aims which could potentially justify a retirement age within an organisation.

3. The ECJ noted that it is for authorities (or employers) 'to find the right balance between the different interests involved, while ensuring that they do not go beyond what is appropriate and necessary to achieve the legitimate aim pursued' and that there is 'broad discretion in the choice of measure they consider appropriate'. This suggests that courts may be reluctant to interfere with the balance struck by an employer providing they are satisfied that the approach adopted is appropriate and necessary.

4. The ECJ also commented on the evidence required and specifically that 'mere generalisations indicating that a measure is likely to contribute to employment policy, labour market or vocational training objectives are not enough to show that the aim of that measure is capable of derogating from the prohibition of age discrimination and do not constitute evidence on the basis of which it could reasonably be considered that the means chosen are likely to achieve that aim'. Evidence that may be required includes 'economic, social, demographic and/or budgetary considerations, which include existing and verifiable data but also forecasts' even if they 'prove to be inaccurate'. This is something that all employers seeking to justify a retirement age must bear in mind. Evidence of some sort will be required, but there is a broad discretion in what form that evidence may take.

5. The ECJ summarised that 'in order for it to be demonstrated that the measure concerned is appropriate and necessary, the measure must not appear unreasonable in the light of the aim pursued and must be supported by evidence the probative value of which it is for the national court to assess'.

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