The notice periods to be given by employers terminating an employee’s employment under German law are regulated in Paragraph 622(2) of the German Civil Code. This stipulates that the length of the notice period to be given by the employer is calculated on the basis of the employee’s length of service. According to Paragraph 622(2), however, any service preceding the employee’s 25th birthday should not to be taken into account when making the calculation.
On 19 January 2010, in Kücükdeveci v Swedex GmbH & Co. KG Case C-577/07 the European Court of Justice ruled that Paragraph 622(2) violates the European Equal Treatment Directive relating to age discrimination. As a result, contrary to the statutory provision, periods of employment before an employee reaches 25 must now be taken into account when calculating the notice period the employer must give.
The Court held that the statutory provision was discriminatory on the grounds of age because staff who start working for a company at a young age would be disadvantaged in comparison to other employees of the same length of service in notice terms because service before 25 is excluded.
The Equal Treatment Directive allows for unequal treatment on the basis of age only under certain conditions – if it is justified by a legitimate aim and if the means of attaining this legitimate aim are appropriate and necessary.
Paragraph 622(2) is intended to provide employers with greater flexibility as younger employees are perceived to have greater occupational and personal mobility. In the Court’s opinion however, the provision did not represent an appropriate means for achieving this broadly legitimate aim because it applies irrespective of the age of the employee at the time of termination, the point where that mobility is actually most important.
The ECJ’s decision will not only have to be observed by the German Courts and employers in the future but, in our opinion, also by any collective bargaining parties anywhere in Europe who have included such a mechanism for calculating notice in their collective bargaining agreements.