Earlier this month the ECJ gave a welcome boost to employers looking to retain a contractual retirement age when it confirmed that a provision in a collective agreement requiring employees to retire at 65 was lawful.
In Rosenbladt v Oellerking Gebäudereinigungsges mbH, a German case involving an employee who had been compulsorily retired at 65, the ECJ once again held that whilst compulsory retirement ages are on the face of it age discriminatory, they can be justified in certain circumstances.
The ECJ accepted that the following were all potentially legitimate reasons for having a fixed and contractual retirement age: facilitating employment for younger workers; recruitment planning; and giving employers a means not to have to dismiss employees on the ground that they are no longer capable of working, which may be humiliating for those of an advanced age – similar to the “collegiality” argument run by the UK employer in the recent case of Seldon v Clarkson Wright and Jakes. In reaching its decision the ECJ took into account a number of factors, including that on retirement the employee concerned was entitled to receive a pension (albeit a small State one) thus providing her with a replacement income of sorts, that compulsory retirement clauses have been in widespread use in Germany for a long time and the provision was collectively agreed with a union.
This decision is useful for UK employers considering whether to try to stick with a compulsory retirement age following the proposed abolition of the Default Retirement Age next year. However, it seems likely that there will have to be some limitations placed on the use of what would seem to be universally applicable reasons for retaining a fixed age, as otherwise the abolition of the statutory default age would be of little effect.