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European Court of Justice hands down judgment on compulsory retirement age

September 14, 2010

In the recent case of "Rosenbladt v Oellerking" the European Court of Justice dealt with the thorny issue of whether the compulsory retirement age of 65 was discriminatory on grounds of age.

Mrs Rosenbladt was a cleaner at barracks in Hamburg for 39 years and was employed on a part-time basis from 1994. Her contract stated that her employment was toterminate at the end of the calendar month in which she could claim a retirement pension, or, at the latest, at the end of the month in which she would reach the age of 65.

On this basis, her employers wrote to Mrs Rosenbladt to inform her that her employment would terminate at the end of May 2008, because she would be reaching retirement age in that month. Mrs Rosenbladt responded to inform her employers that she intended to continue working.

On 28th May 2008 Mrs Rosenbladt filed an age discrimination claim against her employer in the Hamburg Labour Court. She based her claim on the fact that the age limit within the contract could not be justified.

The court held that a compulsory retirement age of 65 in a contract of employment was on the face of it discriminatory, but that such discrimination could be legally justified. The court said that it would only be justified if:

the contract (and with it the compulsory retirement age) has been collectively negotiated with a union;

the employee will receive a pension so that they have replacement income; and,
compulsory retirement has been in widespread use in the relevant country for a long time without having had any effect on the levels of employment.

If age discrimination is legally justified, a Claimant's claim for compensation would fail. In this case, the CJEC found that there was age discrimination, but it could be objectively and reasonably justified by a legitimate aim and the means of achieving that aim were appropriate and necessary.

Employers need to take note of this case when considering contractual compulsory retirement after the default retirement age is abolished in October 2011.