Danish law stated that when dismissing an employee of 12, 15 or 18 years service, an employer must make a severance payment of either one, two or three months pay. However, any employee entitled to a pension at the time of their dismissal would not be entitled to receive the severance payment. The ECJ said this was age discrimination.
Mr Andersen was recruited on 1 January 1979 by the Sønderjyllands Amtsråd (Southern Jutland Regional Council), now the Region Syddanmark (Region of Southern Denmark).
Mr Andersen was dismissed at the age of 63. He decided not to exercise his right to retirement but to register as a job seeker with the relevant authorities. The age for his occupational pension had been set by collective agreement at 60 so his employer did not make any severance payment to him on the ground that Mr Andersen was entitled to draw a pension.
He brought a claim against his employer for payment of a severance allowance corresponding to three months’ salary as he had completed more than 18 years of service.
The case was stayed and referred to the ECJ on the question of whether Danish law that deprived an employee of a severance payment if they were eligible to receive a pension was contrary to Articles 2 and 6 of the Framework Directive 2000/78/EC.
The ECJ found that the law constituted direct age discrimination under Article 2(2)(a) and so looked to see whether it could be justified as an appropriate and necessary means of achieving a legitimate aim.
It was noted that, with one exception, the effect of law was to treat workers who were eligible for a pension in the same way as those who would automatically receive a pension. The exception recognised that workers who had joined their pension scheme after they were 50 might not have been members for long enough to receive a reasonable pension income. They were, therefore, still entitled to a severance allowance.
The ECJ found that the law aimed to provide compensation to people whilst they are looking for work and the severance payments help support them until they found another job. Someone of pensionable age would not need that same cushion: their pension would provide this.
What the ECJ were troubled by was the fact that workers who had reached pension age but who had elected to remain in employment in order to continue their career would be denied the severance allowance. On this basis, the law went beyond what was necessary to achieve the aims pursued, so could not be justified and was unlawful.
Ingeniørforeningen i Danmark, acting on behalf of Ole Andersen -v- Region Syddanmark, C‑499/08,