The Facts

In Rosenbladt v Oellerking Gebaudereinigungsages mbH [2010], a woman worked as a cleaner in barracks in Germany for 39 years. From November 1994 she was employed by cleaning company Oellerking, under a part time employment contract. The contract included a provision which stated that the contract will be terminated at the end of the calendar month in which the employee can claim pension or, at the latest, at the end of the month in which the employee reaches the age of 65. She was given notice of her termination on the ground that she had reached retirement age, on 14 May 2008.

However, she wished to continue working and brought an action against her employer claiming that the termination of her employment was unlawful on the grounds of age discrimination. She argued that the age limit in her contract was unjustified. She was in receipt of statutory pension from 1 June 2008.

The Decision

The ECJ considered that the compulsory retirement age of 65 in a contract is justified, even if on the face of it it is discriminatory, if the following conditions are satisfied;

  • the contract (including the retirement age provision) has been collectively negotiated with a union
  • the employee will receive a pension so that they have a replaced income; and
  • compulsory retirement has been common in the relevant country for a long time without effect on the levels of employment.

The ECJ concluded that compulsory retirement in this case was justified by a legitimate aim. The legitimate aims in this case included assisting young people with employment, planning recruitment and allowing good management of staff. The ECJ also stated that the woman could find another job but did not take into account that, practically, this may be quite difficult for her.

Practice points for employers

In the UK, proposals to phase out the default retirement age ("DRA") will begin on 6 April 2011. Consequently, employers will not be able to issue any new notifications of retirement under the DRA from this date.

By 1 October 2011, the DRA and statutory retirement procedures will be abolished, leaving UK employers without retirement as a statutory option of dismissal. This case could therefore potentially be helpful, together with the decision in the Seldon v Clarkson Wright & James case for employers who plan to retain a contractual compulsory retirement age.

It is important, however, to be aware that UK Employment Tribunals have been hesitant to follow the ECJ's 'relaxed' approach, and the ramifications of the above case in the UK cannot yet be predicted.

Note: The Government's consultation process in relation to the default retirement age closed on 21 October 2010 and the response is expected to be published in November 2010.

Click here for further information on the default retirement age.

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