AN ANALYSIS OF RECENT CASE LAW OF THE ECJ ON AGE DISCRIMINATION IN LIGHT OF

EU’S DEMOGRAPHIC CHALLENGES

Dr. GÖZDE KAYA

The paper focuses on:

Legal base of the age discrimination in both international and European law documents

Active ageing policy of the EU in light of its demographic challenges and current statistics

The approach and the level of scrutiny adopted by the ECJ in compulsory retirement cases

Some critical remarks with regard to the compulsory retirement policies of the Member States

Analysis of selected ECJ cases

Age discrimination occurs when one is treated less favourably than others solely on the ground of his age without any justified reason.

Unjustified discrimination on grounds of age in workplace is prohibited under both national and international law.

Though age discrimination covers also young people, in practice, it is mostly the older people who suffer more from this unfair treatment.

Age Discrimination in ILO Documents

Discrimination on grounds of age has neither been specifically laid down in international documents of the International Labour Organization (ILO) or the Council of Europe.

However, the ILO adopted the ‘Older Workers Recommendation’ in 1980 which “applies to all workers who are liable to encounter difficulties in employment and occupation because of advancement in age”.

The ILO Recommendation does not include a definition of older workers. The Recommendation invites the member countries to take all the necessary measures to strengthen the principle of equal treatment and to combat discrimination in employment and occupation directed against older workers.

Legal Base of Age Discrimination in EU Law1)In Primary Legislation

1) Prohibition of age discrimination is laid down under the Article 19 of the Treaty on the Functioning of the EU (TFEU, Lisbon Treaty)

This article which is still mostly referred to as the famous ex Article 13 Treaty of the EC Treaty, has been introduced by the Amsterdam Treaty in 1999.

This general principle of non-discrimination gives the Council after consulting the European Parliament the competence to take the necessary measures to combat discriminations based on several grounds including sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

2) The TFEU added a new provision -Art. 10 TFEU- in which the EU is expected to combat all forms of discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation when defining and implementing its policies and activities.

3) Charter of Fundamental Rights also recognized the prohibition of age discrimination amongst several grounds formulated in a non-exhaustive list under Article 21.

Legal Base of Age Discrimination in EU Law1)In Secondary Legislation

Discrimination on grounds of age is specifically laid down under the Directive 2000/78/EC (Framework Directive)

Article 6 of the Directive 2000/78 draws particular attention since it provides an exception to the general principle of equal treatment laid down in this Directive.

Hence “Member States may provide differential treatment on grounds of age if it is objectively and reasonably justified by a legitimate aim which is related to that specific country’s national employment policy, labour market and vocational training objectives, provided that the means of achieving that aim are appropriate and necessary”. (Art.6/1 of the Directive 2000/78.)

It also covers a non-exhaustive list of justifications which the Member States may legally rely on. (Art.6/1(a)-(b)-(c) of the Directive 2000/78)

Art. 6/2 of the Directive 200/78 provides the Member States to fix different ages for admission or entitlement to retirement or invalidity benefits as long as they do not amount to sex discrimination.

Article 6 of the Directive 2000/78 tells us that a difference in treatment on grounds of age which would otherwise, amount to direct discrimination, shall not be considered as such since it is objectively justified under specific conditions.

However, in literature there are scholars who advocate that justification should be limited to indirect discrimination and linking it to direct discrimination is likely to cause serious risks and affect the non-discrimination principle negatively.

Hence, the introduction of such a ‘general defence’ mechanism by the Art. 6 is likely to serve to the economic interests of the Member States. (E.Ellis)

Active Ageing in light of EU’s Demographic Challenges and Employment Strategies

Discrimination on grounds of age becomes a more critical issue when the future demographic challenges of the EU, are considered. Ageing currently affects most of the modern societies at a global level.

The population of the EU has been ageing within the last decades. There has been a decrease in fertility rates accompanied by an increase in life expectancy of older people throughout the whole EU.

This gradual transformation in the demographic structure of the EU is expected to have serious financial effects in the increase of social burdens imposed on the Member States.

Recent statistics from EUROSTAT

Eurostat’s latest population projections (EUROPOP 2013) reveal that the total population of the EU-28 countries is around 505.665 million in 2013 and is expected to reach a peak point at 525.5 million by 2050 before declining to 520 million in 2080.

The median age of the EU-28’s population was 41.9 years by 2013 which shows that almost half of the EU-28’s population was older than 41.9 years. The median age is steadily in an increase.

The old age dependency ratio for the EU-28 was 27.5 % in 2013 which means that there were around four persons of working age for every person aged 65 or over.

However, those aged 65 or over are expected to account to 28.7 % of the EU-28’s population by 2080. (it was only 18.2% in 2013). So , the EU-28’s old age dependency ratio is projected to double from 27.5 % in 2013 to 51 % by 2080 which means that every two persons of working age are likely to afford a person aged 65 or over.

Hence, the EU is hardly to confront the old age dependency unless the Member States invoke some concrete measures which include raising the retirement ages and increasing the employment rate of older workers that are expected to increase productivity and enhance competitiveness of the EU at the global level.

Increasing the participation of older workers in the labour market also has been put as a goal under the EU 2020 Strategy adopted in 2010.

General Approach Adopted by the ECJ while Examining Age Discrimination Cases

A large majority of the cases brought before the ECJ on age discrimination concerns the disputes arising from the retirement age and have not been successful.

In almost 93 % of the cases, the Court concluded that the Member States pursued legitimate objectives which were indeed closely linked with their economic policies.

The ECJ has delivered a large degree of discretion to the defendant Member States when they invoke their legitimate objectives for justifying the different treatment in question.

Therefore the Court has been criticized for applying a ‘looser standard’ in justifying age discrimination cases which differs from other discrimination cases.

Some scholars interpret this situation as a contrast between the prohibition of age discrimination and the commonly usage of age to justify the difference of treatment in employment and social policy. Such contrast is likely to cause a ‘certain ambiguity of EU age discrimination law. (D.Schiek)

Some Remarks on Compulsory Retirement Policies of Member States

Member States conduct retirement policies at a pensionable age with a view to sufficiently conduct their employment market requirements.

In that respect, employment contracts are terminated automatically after employees reach a certain compulsory retirement age. 65 is the common age for many European countries to provide a standard pensionable age and a retirement age.

However, the fact that in most cases employees who reach the compulsory retirement age have already been entitled to a full pension shall not be the reason to automatically terminate the employment contract against his will.

So, termination of employment contracts automatically raises serious doubts and critics. The ECJ ruled in Palacios de la Villa that the national legislation concerned was objectively justified since it provided the implementation of the compulsory retirement provision only to the employees who had been entitled to a full pension.

However, people in general are able to earn better salaries and have higher standards of living as long as they work in comparison to what they are entitled through their retirement pensions.

Therefore there might be people who would indeed like to continue working after reaching the retirement age as well as the ones who would prefer to choose some rest and leave the labour market.

Thus, the compulsory retirement ages and the automatically termination of the employment contracts are likely to contradict with the fundamental right ‘to engage in work’ provided under the Art.15 of the Charter of Fundamental Rights of the EU.

Measures invoked with a view of leaving older people outside of the labour market indeed rests on the idea of opening up new employment opportunities for young people in terms of coping against high unemployment rates in most of the Member States. ( By April 2015, Germany has the lowest rate of unemployment with 4.7 % while Greece and Spain hold the highest levels with 25.4 % and 22.7 % respectively.)

Apart from this, assumptions or prejudices that people after certain ages are unlikely to be able to perform their professions as efficient as in the past, leads to the idea that they shall be replaced by the younger ones.

It is true in terms of some certain professions, such as in the case within the tasks related to civil aviation, underground mining or police/army forces, fire fighting. However, this might not be the case for every profession.

Member States particularly rely on ‘promoting intergenerational employment’ as a legitimate objective in most of the cases brought before the ECJ. The Court accepts this legitimate ground to cause an exception to the general prohibition of discrimination on grounds of age.

Malcolm Sargeant makes reference to the ‘lump of labour fallacy’ which was put forward by a UK economist David F.Schloss in the nineteenth century.

According to this assumption, the number of the jobs in an economy is fixed and new employment opportunities for young people can only be created by ending the employment of older workers. Measures for realising this assumption appears in the form of compulsory or early retirement policies. However this assumption is also criticized by many scholars.

It is not easy to build a linkage between the recruitment of young people and the removal of older workers from the labour market. There is indeed nothing to prove the correlation between youth unemployment and old workers’ employment. (Sargeant)

It’s true that these two different sets are unlikely to intersect since they have different characteristics and are unlikely to compete with each other.

It is not always possible to efficiently fill the task performed by an old experienced worker by a younger but less qualified one. In most cases there may not be sufficiently qualified young workers to replace a top position performed by an old experienced worker since experience and seniority are acquired through working. (Dewhurst)

Keeping in mind that in most cases the tasks left by the older workers will mostly correspond to the ones which necessitate both experience and seniority it will unlikely be sufficient to fill these tasks by recruiting young people instead.

Analysis of Recent Case Law of the ECJ on Age DiscriminationCase Georgiev (2010)

Case Georgiev concerns the compulsory retirement for university academicians in Bulgaria.

Mr Georgiev started to work at the university as a lecturer in 1985 and his employment contract was terminated in 2006 after he reached the retirement age of 65. However the University authorised Mr Georgiev to continue working on the basis of a yearly renewable employment contract till 2009, when he reached the compulsory retirement age of 68. Then the employment relationship was terminated and Mr Georgiev brought two actions before the national court.

The legitimate objectives put forward by the University and Bulgarian Government were to allocate the posts for professors between the generations with a view to appointing young professors.

Mr Georgiev claimed that the average age of university professors was 58 and that there were not many of them. This reveals that young people indeed are not that much interested in pursuing a career path as a professor. He argued that the national legislation did not encourage the recruitment of young people.

The ECJ ruled that the encouragement of recruitment and the promotion of access of young people in higher education could constitute a legitimate objective.

However, in case Georgiev, it is thought-provoking to consider that the posts of such high ranking positions could be replaced by young and less experienced persons.

A university professorship is acquired gradually through several academic steps which necessitate long working years.

However the exchange of knowledge and the rise of academic quality in both research and teaching could indeed better be maintained through authorising those university professors to train and transfer their knowledge and experience to the young generation instead of being removed from workplace.

Case Fuchs (2011)

Case Fuchs deals with state prosecutors in the Land Hessen in Germany. The applicants Mr Fuchs and Mr Köhler, worked as State prosecutors till they reached the age of 65 -the compulsory retirement age (when they were entitled to a full pension)-in 2009.

Each of the applicants applied to work for a further year. However, the Ministry of Justice of the Land Hessen rejected their applications. The national court referred the case to the ECJ.

The ECJ firstly provided that the national legislation which set the retirement age of civil servants at 65 did not indeed clearly state the aim pursued.

Both the Land Hessen and the German Government submitted that the setting of a compulsory retirement age for prosecutors was for guaranteeing a fairly distributed employment among the generations.

However the Court stressed that the Member States should not frustrate the prohibition of discrimination on grounds of age laid down in the Directive 2000/78. Thus, that prohibition must be read in the light of the right to engage in work under Art. 15/1 of the Charter of Fundamental Rights of the EU.

The Court concluded that it is for the national authorities to find the right balance between these divergent interests (whether to prolong people’s working life or to provide early retirement) in the context of defining their social policies.

It is even hard for the ECJ to solve this problem of the overlapping interests between the sides. On one hand the Court favours the collective public interest argument put forward by the Member States and on the other hand it recognizes the right to work related individual personal interest put forward by the applicants.

Case Hörnfeldt (2011)

Case Hörnfeldt is related to the compulsory retirement of a part time worker in Sweden.

Mr Hörnfeldt had been working part time in Swedish Postal Services Agency since 1989. His employment contract was terminated on the last day of the month he had reached the age of 67 in 2009.

This measure was taken in accordance with the 67 year rule laid down in the national legislation and the collective agreement covering his contract.

His retirement pension was quite below the Swedish standards for an average living. So, Mr Hörnfeldt, brought an action against his compulsory retirement.

The Swedish Government put forward a wide set of arguments for the aim of this national 67 year measure. Those included to avoid a humiliating situation for workers when their employment contracts were to be terminated due to their advanced age and to facilitate it for young workers to enter the labour market.

The ECJ held that the automatic termination of the employment contracts of employees had long been a characteristic of employment law in EU Member States. This mechanism was based on the balance to be established between several factors such as political, economic, social, demographic and/or budgetary considerations. So, the Member States’ were independent in choosing between prolonging people’s working lives or, adversely encouraging early retirement.

The court accepted the arguments of the Swedish Government with regard to the encouragement of the access of young people to the labour market as well as the other aims put forward.

Case Hörnfeld, shows that the ECJ indeed focused on the system level instead of the individual level and how crucial the justification issue was in terms of legitimizing the specific national measure.

CONCLUSION

The ECJ has adopted a looser standard of scrutiny when adopting the legitimate grounds put forward by the Member States in age discrimination cases in comparison to other discrimination cases which it applies a stricter analysis.

The Court pursues a collective public interest approach instead of an individual right based approach.

The Court accepts the legitimate objectives put forward by the Member States as long as the individual concerned is entitled to a full pension.

The court is unlikely to prefer dealing with other details of the case since aims such as providing an intergenerational balance prevail over the right to engage in a work.

However, it is hard to find any linkages between sending older workers to rest and recruiting younger workers instead.

It is hard to assume that these two different sets have an intersection point. The high position posts left by older workers which necessitate deeper knowledge and experience are unlikely to be filled by recruiting young workers.

So, people should better choose whether or not to leave their profession on their own will after a particular age instead of being automatically left out of the game.

This solution will be a more compatible one with the individual’s fundamental right to work.

However, given some particular professions which are closely linked with the physical capabilities of performing a task might be excluded with security reasons. Even within those professions, there still shall exist positions which will not cause any threats or be performed with a less physical ability, to be arranged for older workers.

Given the demographic challenges the EU is likely to face an increase in the old age working population of the EU will inevitably affect the EU’s global competitiveness against the US and Japan and will be in line with the EU 2020 Strategy.