In August 2008, SAS dismissed a number of employees due to necessary staff cuts. In connection with negotiations with, inter alia, the Danish Airline Pilots Association, it was decided that the pilots entitled to retire were to be dismissed. This agreement confirmed an agreement entered into already in 2006, according to which the pilots entitled to retire were to be dismissed first in case of staff cuts. As the pilots were entitled to pension when reaching the age of 60 according to an agreement between SAS and the Danish Airline Pilots Association, all the dismissed pilots had turned 60.
The Copenhagen City Court found that the age discrimination was not fair, and the Court awarded each of the pilots compensation equivalent to nine months' pay, which amounted to approx. DKK 900,000.
SAS appealed against the ruling of the Copenhagen City Court acknowledging that the dismissals constituted age discrimination contrary to the Anti-Discrimination Act. Before the High Court, the case therefore only concerned the amount of compensation, if any.
SAS claimed that the compensation awarded was to be reduced or rejected as the dismissals had been necessary due to the market conditions. In addition, SAS stated that the legal position was unclear at the time of the dismissals. Further, the criteria determining who was to be dismissed had been agreed between SAS and the unions of the pilots.
The pilots claimed that, when determining the compensation, importance should be attached to the fact that, after having been dismissed, the pilots had not been able to obtain new jobs as pilots.
High Court ruling
The High Court found that when determining whether and to which extent to award compensation, importance should be attached to the severity of the violation. In this respect, the reason for the violation should be taken into consideration as well as the infringement inflicted on the person.
The High Court attached importance to the fact that it had been necessary to make the dismissals, and that the criteria of the dismissals had been agreed between SAS and the Danish Airline Pilots Association. The criteria had been considered the most careful handling of the staff cuts as the parties wanted to make a social consideration for the younger pilots having families instead of the older pilots who were entitled to pension.
The High Court attached importance to the fact that the dismissed pilots did not have any realistic chances of finding a new job, but also that the pilots until 2005 - when the mandatory dismissal age had been increased from 60 to 65 years - were to expect that the mandatory dismissal age was 60. For these reasons, the dismissed pilots should have arranged their pensions and private economies in consideration of the fact that they were to retire at the age of 60.
Finally, the High Court attached importance to the fact that the legal position had not been completely clear, and that the dismissed pilots at the time of the dismissals had been employed for 18-24 years.
The High Court then reduced the awarded compensation from DKK 900,000 to DKK 300,000 to each pilot equivalent to approx. three months' pay.
Referring to the unclear legal position and the pilots' expectation of retirement, the High Court reduced compensation concerning age discrimination with the result that the level is in accordance with former compensation, e.g. the Eastern High Court ruling of 16 June 2011 where the Danish Broadcasting Corporation was ordered to pay DKK 300,000, and another Eastern High Court ruling of 11 September 2009 where a number of employees with SKAT were awarded DKK 200,000 for age discrimination. By these rulings, the High Court is perhaps sending a signal that the level of compensation should not necessarily reflect a certain number of months' pay, but that it may be a more or less fixed amount.
The content of this Newsletter is not, and should not replace, legal advice.