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Compulsory Retirement and Age Discrimination

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An important ECJ judgment on compulsory retirement has been handed down today.

In Rosenbladt v Oellerking Gebaudereinigungsges mBh, the ECJ held that a compulsory retirement age of 65 in a contract of employment - whilst prima facie discriminatory on grounds of age - is justified if the following conditions are met:

  • the contract (ie the retirement age) has been collectively negotiated with a union;
  • the employee will receive a pension (on the facts, a state pension, but presumably an occupational pension will do when the state pension age rises) so that they have replacement income; and,
  • compulsory retirement has been in widespread use in the relevant country for a long time without having had any effect on the levels of employment.

This has massive ramifications for employers seeking to justify a compulsory retirement age after the default retirement age is abolished in October 2011. However, be aware that UK tribunals have been reluctant to date (at least in those cases I am aware of) to follow the liberal approach of the ECJ when it comes to justifying age discrimination.

The relevant sections of the judgment appear at paragraphs 58-69.

Note that another ECJ judgment on age discrimination has also been handed down today (Anderson v Region Syddenmark), which is concerned with severance payments to older workers. I haven't had time to read it - if anyone fancies summarising it, please feel free.