European court provides guidance on age discrimination

The Court of Justice of the European Union (CJEU) has given judgment on two German cases (Fuchs and Kohler v Land Hessen) concerning the compatibility of compulsory retirement rules with the EU Equal Treatment Directive. The Directive permits what would otherwise be age discrimination if it is objectively and reasonably justified by a legitimate aim and if the means of achieving that aim are appropriate and necessary.

Mr Fuchs and Mr Kohler, both civil servants in Germany, were not allowed to work beyond the retirement age of 65 laid down by the Land (German state) which employed them. Their complaints resulted in the German national courts referring a number of questions to the CJEU, in particular, it asked:

  1. What constitutes a legitimate aim under the Directive when seeking to justify the compulsory retirement of civil servants? In this case, five aims put forward; creating a ‘favourable age structure’ (i.e. a balance of employee ages), planning staff departures, creating opportunities for promotion, preventing legal disputes with older employees over their continued fitness for service and achieving budgetary savings (by not replacing those retiring).
  2. What evidence must be produced to demonstrate that an otherwise discriminatory measure is appropriate and necessary?

In responding to question one above, the Court confirmed that four of the aims were capable of being legitimate aims under the Directive. However, ‘achieving budgetary savings’ could not constitute a legitimate aim under the Directive – but could still be “taken into account” when a member state decided what national measures to adopt under the Directive. The Court went on to decide that the retirement age was a proportionate means of achieving the four aims given that employees retire on a full pension, there is a possibility for some employees to continue working until 68 and retirees are free to continue working elsewhere.

In responding to question two above, the CJEU essentially has left it to national courts to assess what evidence is required, although it states that mere generalisations are not enough. The case adds to the list of legitimate aims that might be used to justify compulsory retirement – the aim of seeking to avoid legal disputes with older employees over their fitness for service. However, the legal grounds for adding that aim are not spelt out in the judgment and it was only a supporting aim on the facts of this case, so reliance on it, on its own, might be risky.

Another recent age discrimination case (Prigge v Deutsche Lufthansa AG) considered a compulsory retirement age contained in a collective agreement, recognised by German law, for Lufthansa airline pilots. This fixed retirement at 60 because, at that point, pilots were considered as no longer possessing the physical capabilities to carry out their professional activity. However, this contrasted with national and international legislation that fixes that age at 65. As such, the CJEU held that it was contrary to the age discrimination provisions of the Directive.