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Retirement ages

Posted on 22nd October 2010
Case law

Two European cases have cast some light on the position for employers if the default retirement age is removed as currently proposed by the Government.

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The collective agreement did not go beyond what was appropriate and necessary

Case one | Rosenbladt v Ollerking

In this case the German based employer relied upon a collective agreement under which an employee retires when they reach the standard retirement age. The standard retirement age under the collective agreement was 65. Mrs Rosenbladt was notified that her employment would end on 31 May 2008, by which time she would have reached 65. She argued that the termination of her employment was discriminatory on the grounds of age. The ECJ disagreed.

Whilst the provision was potentially discriminatory, the ECJ concluded that it was objectively justified. The collective agreement was aimed at objectives including 'sharing employment between the generations', recruitment planning and personnel management. It also held that the collective agreement did not go beyond what was appropriate and necessary.

Case two | Andersen v Region Syddanmark

Mr Andersen claimed for a severance allowance payable under Danish law on the termination of employment where an employee had been employed for more than 12 years by the same employer. The allowance was not payable where the employee, at the time of termination, had joined a pension scheme prior to the age of 50 and could draw on their pension on termination.

The ECJ held that the provisions of Danish law were discriminatory on the grounds of age. It concluded that exclusion of entitlement to the payment was inextricably linked to age. It went onto conclude that the provisions were not objectively justified, in that workers might be forced to take a pension earlier than they wished because they were not entitled to the severance allowance that would otherwise have been paid to them.

In practice

The two cases support the principle that employers can 'retire' employees in appropriate circumstances and without a finding of discrimination where the aims of the employer are objectively justified. They provide an insight into how employers may continue to 'retire' off employees if and when the default retirement age and retirement as a fair reason for dismissal is removed as currently anticipated by October 2011.

We will be providing general guidance on how employers can deal with retirement in a future edition of hrlegalnews as and when the Government confirms the legislation that will be introduced.

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