Introduction

The issue of forced retirement due to age raises constitutional questions of the first order specifically regarding the constitutional right to:

  • liberty;
  • dignity and property;
  • freedom of occupation; and
  • equality in general and in the workplace in particular.

Forced retirement due to age was abolished decades ago in the United States and has also been abolished in Australia, Canada and the United Kingdom. However, the Organisation for Economic Cooperation and Development enables member states to enact forced retirement due to age based on legitimate concerns, such as the necessity to regenerate the market and the workplace.

Despite age being recognised as an unlawful and irrelevant criterion for employment in most anti-discrimination legislation in Israel and substantial case law, the Retirement Age Law 2004 allows employers forcibly to retire employees at the age of 67, the mandatory retirement age.

Facts

The Supreme Court recently ruled on a petition submitted by several university professors to annul the provision in the Retirement Age Law that allows employers to forcibly retire employees at the mandatory retirement age.(1)

The petitioners contended that it was inconceivable that the law should enable forced retirement due to the age of employees who were fit and still able to fulfil their duties and who wished or needed to continue working.

Decision

In a special composition of seven justices, the Supreme Court ruled that mandatory retirement due to age breaches the constitutional rights to dignity and equality which are protected under the Basic Law: Human Dignity and Freedom. The court also criticised the sweeping language of the statutory provision that allows employers forcibly to retire employees due to age and which does not distinguish between the different economic situations of employees who reach the mandatory retirement age.

By so ruling, the Supreme Court upgraded the right not to suffer discrimination in the workplace due to age to the level of a constitutional right, even when the discrimination is expressed by forcibly requiring employees to retire at the mandatory retirement age. Thus, the petition successfully passed the first test of the constitutional examination.

The ruling is significant, because in order to justify an injury to a constitutional right, the following criteria must be met:

  • There must be contrary rights and interests of considerable magnitude;
  • There must be a necessary connection between the injury and the fulfilment of such rights and interests; and
  • The injury must not exceed what is necessary for such fulfilment.

Therefore, the court turned to the second stage of the judicial review and examined whether forced retirement at the mandatory retirement age reflects a reasonable balance between various competing legitimate interests.

In this context, considerations raised in the past to justify the constitutional violation had been removed from the constitutional debate. First, forcible retirement due to age is no longer justified by reduced performance, as age is not considered to be a predictor of performance. Second, the Supreme Court president has stated that economic considerations such as the cost of performance examinations cannot be used to justify the violation of a constitutional right.

Hence, the arguments in favour of forcible retirement due to age which were considered cogent included:

  • the inter-generational consideration (ie, the employment of older employees at the cost of younger employees);
  • the protection that the mandatory retirement age provides against ageism up to the mandatory retirement age;
  • the connection between tenure and the mandatory retirement age; and
  • the humiliation involved in performance tests.

The petitioners attempted to show that such considerations do not justify the damage caused to older employees that are forced to retire. They contended that economically, employment is not a zero-sum game. An increase in employment results in added prosperity and additional employment opportunities. The budgetary constraints that may occur in certain employment sectors are temporary and can be resolved, as they were when the retirement age was raised from 65 to 67 in 2003.

The petitioners further contended that the way to protect against ageism is not to validate it, as forced retirement due to age does, but rather to condemn and eradicate it. The connection between tenure and forced retirement due to age is theoretical and has not been empirically proven. Further, it can be argued that tenure is intended to protect employees who wish to continue working and that their interests should not be subordinated to the interests of non-performing employees. Finally, the petitioners contended that performance tests should not be legally regarded as degrading, especially when they are optional and relevant, such as those that the petitioners proposed (similar performance tests have already been adopted by the legislature in various other situations and others are used according to various collective agreements).

However, the court decided that forced retirement due to reaching the age of 67 reflects a balance between competing legitimate interests that is still in the range of reasonableness. The court, therefore, rejected the petition.

The court did not annul the statutory provision that allows employers forcibly to retire employees due to age. However, its decision conveys the need to re-examine the existing balance, which currently reflects the recommendations of a government committee from over a decade ago, as the context has changed since then.

In the court's view, the re-examination of balance – in which wide-reaching social and economic issues are involved – is due and should be undertaken by Parliament and the government. Justice Neal Hendel even stated that should a re-examination not be undertaken within a reasonable time, the parties reserve the right to re-open the issue.

Comment

The court's decision is an important step in the battle against forced retirement due to age. Previously, the issue of whether a constitutional right is compromised by forced retirement at the mandatory retirement age had not been fully resolved. However, the court's decision makes it is clear that the right to work is not a secondary right but rather a constitutional right, and that the injury caused as a result of its violation is not trifling but rather serious.

In the interim, two legislative initiatives have been undertaken. Labour MP Arel Marglit submitted a bill to abolish mandatory retirement due to age and replace it with an occupational test. The government also formed a committee to examine the possibility of raising the retirement age for women which will examine the general issue of retirement and the need to adjust the age of retirement due to increased life expectancy.

For further information on this topic please contact Shoshana Gavish at S Horowitz & Co by telephone (+972 3 567 0700) or email (shoshanag@s-horowitz.co.il). The S Horowitz & Co website can be accessed at www.s-horowitz.com.

Endnotes

(1) HCJ 9134/12, Moshe Gavish v the Knesset (April 21 2016).

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