In a case concerning mandatory retiring age and the right to waiting time payment, the Supreme Court affirmed that discrimination due to age was justified by legitimate objectives.

Background

An employee with TDC was entitled to waiting time payment for five years if he was dismissed. The waiting time payment would cease, however, when the employee turned 67, which was the mandatory retiring age under the collective agreement.

The employee stated, inter alia, that a mandatory retiring age was contrary to the Anti-Discrimination Act, and that it was also contrary to the Act that he would receive waiting time payment for a shorter period due to his age.

Grounds and conclusion of the High Court

Due to the fact that the employee received waiting time payment for a shorter period of time, the Court found that the employee was discriminated against due to his age. The question remaining was then whether the discrimination was objective and justified by legitimate objectives, and whether the provision of the collective agreement went beyond what was necessary and appropriate in order to achieve the desired objective, see section 5a (3) of the Anti-Discrimination Act.

The provision of a mandatory retiring age of 67 had been agreed in the middle of the 1990'ies. At that time, the employees of TDC had a higher average age compared to other companies. The objective of the mandatory retiring age was, inter alia, to achieve an age diverse workforce being in better line with the rest of the labour market. Further, TDC was facing technological and strategic changes which would result in a reduction of the staff and a need to provide new employees with the qualifications that TDC would need in the future.

The high court referred to the ruling of the European Court of Justice, case C-45/09, Gisela Rosenbladt vs. Oellerking Gebäudereingungsges in which the Court construed article 6 (1) of the Employment Equality Directive, which article is implemented in section 5a (3) of the Anti-Discrimination Act.

It appears from the ruling that the labour market parties have broad discretion when it comes to the objective they wish to pursue within social politics and employment and the choice of means to achieve this objective. In continuation thereof, the ruling determines that general provisions concerning automatic termination of contracts of employment, which have been laid down based on a political and social consensus based on the notion of sharing employment between the generations should be considered objective and fair and should therefore not go beyond what is necessary in order to achieve the desired objective.

Based on the Court's construction and the broad discretion to which the labour market parties are entitled, the high court found that both the mandatory retiring age of 67 and the limitation of the waiting time payment period were justified by legitimate objectives, and that the provision did not go beyond what was appropriate and necessary to achieve these objectives. The court therefore rules in favour of TDC.

Grounds and conclusion of the Supreme Court

The Supreme Court reached the same result with almost the same grounds.

The Supreme Court attached importance, inter alia, to the fact that a provision on mandatory retiring age may ease young peoples' access to the labour market and at the same time take into consideration the older employees.

The Supreme Court affirmed the high court ruling in favour of TDC.

Comments

It is important to keep in mind that, in case of a potential violation of the rules on age discrimination, a specific assessment should be made as to whether the objective is legitimate, and that the means to achieve the objective should not go beyond what is appropriate and necessary.

In pending proceedings before the Supreme Court concerning a public servant's entitlement to redundancy pay, even though he has reached the retiring age, the Advocate-General's statement goes in another direction than this ruling. However, the European Court of Justice and the Supreme Court have not delivered their final rulings.

The Advocate-General stated that it is contrary to the Anti-Discrimination Act not to pay redundancy pay to public servants who have reached the retiring age. The arrangement exceeded what was necessary in order to achieve the objective, being that redundancy pay is only paid to public servants who remain available for new positions. For more information on the Advocate-General' statement, see our newsletter of 21 February 2013.

The content of this Newsletter is not, and should not replace, legal advice.

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Marianne Lage

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