- Date:
- 16 Nov 2012
The EU Court has ruled that the Employment Directive does not preclude a compulsory retirement age of 67 where the employee is then entitled to pension
The EU Court has ruled that the Employment Directive does not preclude a compulsory retirement age of 67 where the employee is then entitled to pension.
In EU law, there is a general prohibition against dismissing employees because of their age. However, the member states may adopt a compulsory retirement age if this is objectively and reasonably justified by legitimate aims and if the means of achieving those aims are appropriate and necessary. This case centred on whether a Swedish provision about compulsory retirement at the age of 67 satisfied the conditions.
A Swedish postman was dismissed when he turned 67. This was permitted under Swedish law. But the postman would have liked to work a few more years in order to increase his old-age pension. As a result, he sued his employer, and during those proceedings the Swedish Government asked the EU Court whether the Swedish provision about compulsory retirement at 67 satisfied the conditions of the Employment Directive.
Directive is no impediment
The Swedish Government argued that the provision about compulsory retirement at 67 was objectively and reasonably justified. Swedish law did not permit a voluntary retirement age which was lower than 67 and employees were entitled to retire when they reached the age of 67. The national provision therefore meant that employees were entitled to work until the age of 67 and thus able to accrue a good pension.
The Swedish Government argued that the provision about compulsory retirement at 67 was objectively and reasonably justified. Swedish law did not permit a voluntary retirement age which was lower than 67 and employees were entitled to retire when they reached the age of 67. The national provision therefore meant that employees were entitled to work until the age of 67 and thus able to accrue a good pension.
The EU Court ruled that a compulsory retirement age of 67 is not at odds with the Employment Directive if justified by legitimate employment aims. One of the factors taken into account by the EU Court in this connection was that employees were entitled to work until the age of 67, that the provision did not force employees to retire definitively from the labour market and that the employees accrued an entitlement to financial compensation in the form of a pension.
Norrbom Vinding notes
- that, in its ruling, the EU Court does not address the issue of whether the conditions of the Directive that a compulsory retirement age must be reasonably justified by legitimate employment and labour market aims were satisfied in this case; but
- that, with its ruling, the EU Court continues to maintain in general that a compulsory retirement age which is justified by general employment aims and which is proportional is not at odds with the prohibition against age discrimination.
