Thu, 4 Nov 2010

Firm wins age ruling

The Court of Justice of the European Union (CJEU) handed down a significant judgment relating to age discrimination last month.

The ruling refers to the case of Rosenbladt v Oellerking Gebäudereinigungsgesellschaft, which concerned a collective agreement for employees in the commercial cleaning sector. The contract stipulated an automatic termination of employment at the age of 65.

The CJEU considered whether the termination of employment was justified, and ruled compulsory retirement was an appropriate and necessary means of achieving the aims of the company’s decision - to facilitate employment for young people, plan recruitment and allow good management of a firm’s personnel.

Owen Warnock, partner at international law firm Eversheds said: ‘This decision, together with the recent Court of Appeal decision in the Seldon v Clarkson Wright and Jakes, could be seen as encouraging for employers planning to retain a compulsory retirement age when the default retirement age is abolished next year.’

The Seldon case, which reached the Court of Appeal, concerned a partner at a law firm rather than an employee. The partner had been compulsorily retired at the age of 65. He claimed that this was direct age discrimination. Under the Employment Equality (Age) Regulations 2006 it is automatically lawful to retire an employee at the age of 65 (the Default Retirement Age – DRA) provided certain procedural requirements are satisfied, the Court ruled.

A retirement age for an employee other than the DRA could be age discrimination unless it can be objectively justified.

Anthony Cooper, partner at Law firm Blake Lapthorn told Payroll World: ‘If the DRA is scrapped then the test for objective justification of a retirement age will become an important consideration for employers.’

He added: ‘While the case does appear to set a low hurdle for justifying a retirement age it should be approached with caution at this stage as it did not relate to an employee but rather a compulsory retirement age that had been agreed in a partnership deed between partners of equal bargaining power.