Age discrimination and retirement ages
Palacios Case C-411/05, 16 October 2007
Facts:
This was a Spanish case concerning a collective agreement which contained an agreed retirement age. Mr Palacios was born in February 1940 and had worked for his employer since 1981. In accordance with the collective agreement he was dismissed when he reached the age of 65, after which he made a complaint of age discrimination. The collective agreement stated that ‘in the interests of promoting employment’, there would be a retirement age of 65 ‘unless the worker concerned has not completed the qualifying period required for drawing the retirement pension, in which case the worker may continue in his employment until the completion of that period.’ So there was a caveat that the employee would be entitled to a full pension before being compulsorily retired.
Findings of the court:
The Court of Justice accepted, as it has done in all cases concerned mandatory retirement, that the policy amounted to less favourable treatment on the grounds of age and therefore needed to have a legitimate aim and show that retirement was an appropriate and necessary means of achieving that aim. The retirement policy seems to have been adopted in Spain, according to the Court, at the instigation of the social partners, as part of a policy of promoting intergenerational employment. The Court stated that this was a legitimate aim. The Court concluded by stating that:
“It does not appear unreasonable for the authorities of a Member State to take the view that a measure such as that at issue in the main proceedings may be appropriate and necessary in order to achieve a legitimate aim in the context of national employment policy, consisting in the promotion of full employment by facilitating access to the labour market.”
Thus the Court accepted that an exception could be made to the general principle of equality, with regards to age, in order to facilitate the employment of younger workers. The direct age discrimination was therefore justified.
Implications:
The cases concerning retirement ages have generally found that direct age discrimination is justified in relation to retirement ages as a means of allowing younger workers to enter the employment market.