Supreme Court refers questions about redundancy pay to the EU Court

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Date:
24 Sep 2014

the danish supreme court recently ordered a preliminary reference of the issue of whether an employee is entitled to redundancy pay under section 2a of the danish salaried employees act from a private employer if the employer refuses to pay in reliance on section 2a(3).

By:
Yvonne Frederiksen

The Danish Supreme Court recently ordered a preliminary reference of the issue of whether an employee is entitled to redundancy pay under section 2a of the Danish Salaried Employees Act from a private employer if the employer refuses to pay in reliance on section 2a(3).

Under section 2a of the Danish Salaried Employees Act, employees are entitled to redundancy pay on termination if they have been continuously employed with the same employer for a certain number of years. Under section 2a(3) of the same Act, however, employees are not entitled to redundancy pay if they are entitled to a retirement pension from their employer at the effective date of termination – regardless of whether they intend to work or retire.

In its ruling of 12 October 2010 (Ole Andersen C-499/08), the EU Court held that section 2a(3) of the Danish Salaried Employees Act is incompatible with the EU law principle of non-discrimination on grounds of age.

In a judgment rendered on 17 January 2014, the Danish Supreme Court held that section 2a(3) cannot be relied upon by a public-sector employer where the employee is able to show that he or she “intends to temporarily waive retirement pension with a view to pursuing his or her occupational career”.

After the Supreme Court’s judgment, however, it has been unclear whether the principle of non-discrimination on grounds of age has the same effect – and is thus directly applicable – in relation to private employers.

In a case pending before the Supreme Court, a private employer has argued that a clear and unambiguous statutory provision like section 2a(3) cannot be set aside in relation to a private employer with reference to the EU law principle of non-discrimination on grounds of age.

But the EU Court has taken the view on several occasions that the principle of non-discrimination on grounds of age is to be regarded as a general principle of EU law and that the national courts should therefore refrain from applying national provisions which may be at odds with this principle – and that this also applies in cases against private employers.

However, some of the advocates general have criticised this view.

And now the Danish Supreme Court has asked the EU Court to consider whether the general EU law principle of non-discrimination on grounds of age also prohibits provisions such as section 2a(3) of the Danish Salaried Employees Act.

 

Norrbom Vinding notes

  • that when the Supreme Court’s ruling is available, it will finally be clear whether an employee protected by the Danish Salaried Employees Act is entitled to redundancy pay under section 2a of the Act from a private employer in a situation where the employee would have been entitled to redundancy pay in accordance with the EU Court’s ruling in Ole Andersen and the Danish Supreme Court’s judgment of 17 January 2014, because the employee is able to show that he or she intends to continue his or her occupational career; and
  • that, in the meantime, private employers will thus still be entitled to refuse to pay redundancy pay where the conditions of section 2a(3) are fulfilled, citing the unclear state of the law.