On December 18 2014 Parliament passed a decision to repeal the 70-year rule set out in the Act on Prohibition against Discrimination in respect of Employment. When the amendment enters into force on January 1 2016, it will no longer be possible to maintain individual agreements regarding the automatic termination of an employment relationship due to an employee turning 70.
This means that after January 1 2016, any provisions in employment contracts on automatic termination will be invalid. Therefore, companies should start amending their employment contracts already so that such provisions are deleted before the abovementioned date. If employment contracts are not amended the employer risks breach of the Act on Employment Contracts and, in the worst case, may be ordered to pay compensation. If a company has employees who turn 70 before January 1 2016, there is no need to amend their contracts.
If the company is subject to a collective bargaining agreement entered into after January 1 2008, a provision regarding automatic termination on turning 70 can be maintained until the date on which it is possible to terminate the collective bargaining agreement.
For collective bargaining agreements entered into before January 1 2008, it will still be possible to maintain the applicable age limits for compulsory termination, provided that they are objectively and reasonably justified by legitimate purposes and the means to reach such purposes are appropriate and necessary.
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