The special rule of the Non-Discrimination Act stipulating that an employer may lawfully determine that an employee is to resign when reaching 70 will be abolished from 1 January 2016 according to a recent bill.

PROHIBITION AGAINST DISCRIMINATION DUE TO AGE

The Non-Discrimination Act contains a general prohibition against direct and indirect discrimination due to age. The prohibition implies that, in general, an employer may not attach importance to the employee's age in connection with employment, dismissal, transfer, promotion or determination of pay and employment terms.

The so-called 70-year rule is an exception as the rule provides that, in case of individual or collective agreement, it may be agreed that the employment will end without further notice when the employee reaches 70 or more.

With this bill, the government wishes to abolish the rule.

The reason for the abolishment is i.a. that the rule is a barrier preventing skilled groups of employees from participating in the labour market. Such barriers must be removed as far as possible with the result that all persons capable of working get the opportunity to work.

IMPLICATIONS

An abolishment of the exemption rule will imply that it will not be possible to agree individually or collectively that the employment ends when the employee reaches a certain age.
If the bill is adopted, this means that applicable individual agreements on mandatory resignation due to age will be invalid from 1 January 2016 after which they may no longer be enforced vis-á-vis the employees.

As regards collective agreements, the bill contains a transition rule according to which applicable collective agreements on mandatory resignation when reaching 70 will still apply until the time when the collective agreement may be terminated. 

COMMENTS

If the bill is adopted, any terms in applicable individual agreements on automatic resignation when reaching 70 will be invalid from 1 January 2016. In order to ensure that applicable contracts of employment comply with the Contract of Employment Act, we therefore recommend that these contracts are amended and made consistent with the abolishment of the rule.

It is noted that the bill does not change the exemption rule of the Non-Discrimination Act according to which age limits in collective agreement may be maintained if they are objectively and reasonably reasoned by a legitimate purpose within the framework of Danish law.

 

contacts

Marianne Lage

Partner

Maria Schmiegelow

Attorney