The European Court of Justice (“ECJ”) has provided what is, at best, a confusing decision with regard to a compulsory retirement age in the case of Fuchs v Land Hessen. Some employment law commentators have gone further and say it is verging on the incomprehensible.
The ECJ was asked to decide a number of questions on when a compulsory retirement age is justified. It seems to hold that a retirement age is potentially justified to encourage the promotion of a younger workforce and, even more controversially, it suggests it is legitimate to retire older workers to prevent possible disputes concerning employees’ fitness to work beyond a certain age.
The ECJ also seems to adopt a test of whether it is “reasonable” to adopt a retirement age rather than whether it is proportionate to do so. Reasonable and proportionate, whilst similar, are not quite the same thing.
The claimants, both prosecutors, had a retirement age of 65 which could be extended to 68 by agreement if this was in the interests of the service. When their requests to work beyond 65 were rejected, they claimed that the retirement age breached the prohibition on age discrimination in the Equal Treatment Framework Directive. The national court doubted that the retirement age complied with the Directive and made a reference to the ECJ, suggesting that budgetary savings were the rationale behind the measure.
It was common ground that the retirement age of 65 constituted a difference in treatment on the ground of age. It was originally based on the presumption that people over 65 were no longer fit to work but that was no longer its underlying rationale. Land Hessen argued that the retirement age was nevertheless objectively justified by the legitimate aims of creating a balanced age structure, enabling staff planning, encouraging the recruitment and promotion of young people and avoiding performance disputes with older workers. On the facts, the ECJ held that this law requiring state prosecutors to retire at 65 (albeit subject to some exceptions) on a generous pension was justified.
This case follows a line of European cases in the last couple of years that demonstrates it might be possible for employers to justify a compulsory retirement age. However, one word of warning – the UK courts and tribunals have held a much tougher stance on this point and it will be them that will decide this tricky point going forward. A question which was referred to the ECJ was whether cost alone can justify discrimination (in the UK, we currently have the controversial ‘costs plus’ justification, namely cost cannot be the only factor in justifying the discrimination). Unfortunately, the ECJ did not deal with this point.
For a free initial consultation please call 01202 499255 and Kate Fretten or Paul Burton will be happy to discuss any questions you may have.
Comments