The Court of Justice of the European Union (CJEU) has examined the Swedish ’67-year rule’ in the case of Hornfeldt v Posten Meddelande AB (2012). The rule means employees in Sweden have the right to work until 67. However, at the end of the month in which an employee turns 67, an employer is permitted to terminate the employment by giving one month’s notice. This was challenged as unlawful age discrimination by an employee in the Swedish Postal Service who was dismissed under this rule.
The Swedish District Court accepted that the rule meant that employees were treated differently on the grounds of age and therefore, it would need to be objectively justified in accordance with national law which implemented the EU law on equal treatment. Objective justification means that it must be shown that there is a legitimate aim for the rule, that the rule is reasonably necessary to achieve that aim and it is proportionate i.e. there are no less discriminatory means available. The District Court referred some questions to the CJEU about the legitimacy of the rule.
The Swedish Government submitted a number of ‘legitimate aims’ to the CJEU, including:
- Avoiding termination of employment in humiliating circumstances by virtue of an employee’s age;
- Enabling retirement pensions to be calculated based on the full course of a career with a definitive end date;
- Reducing obstacles for those wishing to work beyond 65 (which was the previous Swedish retirement age);
- Adapting to changes in the population and the risk of labour shortages;
- Establishing a right for individuals to work until 67; and
- Making it easier for young people to enter the labour market.
The CJEU felt that the rule was objectively justified and proportionate to the aims submitted. The CJEU particularly cited the fact that the rule did not impose automatic retirement at 67 as there was nothing to prevent an employer offering further fixed-term work. It also did not cause hardship to employees who could still claim pension from the age of 65.
The CJEU is yet to find any national retirement to be contrary to EU law. This is interesting since the UK abolished the default retirement age of 65 in April 2011. For employers in the UK who wish to impose a retirement age, they must be able to evidence the aims of the retirement age, justify the age chosen and provide evidence as to why a less discriminatory scheme would not achieve the same aims. Employers should note that the UK Courts and Tribunals have proven to be much stricter on the application of objective justification then the CJEU, which makes it more difficult for an employer to force an employee to retire (please see our article on the UK case of Seldon v Clarkson Wright and Jakes (2012) here).
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team on 01243 836840 or [email protected].