This ECJ decision relates to German mandatory retirement provisions.
German federal law stated that civil servants must retire upon reaching a specific retirement age, though left it to the various regions to determine what that retirement age should be. Land Hessen (a region in West-Central Germany) set the retirement age for its civil servants at 65. Civil servants could make applications to postpone this by a period of up to one year, provided that the overall retirement age did not exceed 68.
Mr Fuchs and Mr Köhler both worked as State Prosecutors for the Ministry of Justice until the age of 65. They both applied to postpone retirement by one year, but this application was rejected by the Ministry of Justice who stated that “it was not in the interests of the service for them to remain in their posts”.
Mr Fuchs and Mr Köhler submitted claims arguing that the retirement provisions were contrary to the prohibition on age discrimination contained in Article 6 of the Framework Directive 200/78/EC.
The national court doubted the compatibility of the law with Article 6 and considered that compulsory retirement at the age of 65 was unlawful age discrimination. The national court suggested that budgetary concerns were the real rationale behind the mandatory retirement provisions and referred a number of questions to the ECJ.
Broadly speaking, these questions were:
- Do the mandatory retirement provision have a legitimate aim?
- How should a member state demonstrate the appropriateness and necessity of the mandatory retirement provisions?
- Are the mandatory retirement provisions inconsistent with the aims, given that they permit postponement of retirement?
In relation to the first question, Land Hessen argued that the legitimate aims behind the mandatory retirement provisions were:
- ensuring a balance between the generations;
- the efficient planning of the departure and recruitment of staff;
- encouraging the recruitment and promotion of young people; and,
- avoiding disputes relating to employees’ ability to perform their duties beyond the age of 65.
Rather than assessing the legitimacy of each aim separately, the ECJ’s judgment seems to deal with them all together. The result is a judgment which is far from clear and difficult to fully comprehend. That said, the ECJ appears to suggest that the establishment of an age structure in the workplace which ensures a balance between the generations could be a legitimate aim.
In addition, the ECJ looked at the legitimacy of the aim of achieving budgetary savings and stated that these could be taken into account alongside other political, social or demographic concerns. Therefore, whilst budgetary considerations can be a factor, such considerations cannot in themselves constitute a legitimate aim within the meaning of Article 6(1) of Directive 2000/78. This would appear to support the existing “costs plus” approach adopted by the courts in the UK.
In relation to the second question (whether the measures were appropriate and necessary i.e. proportionate), the ECJ did not pass judgment and stated that it was for the national court to determine, based on the probative value of the evidence before it. The ECJ also appeared to lean towards a test of “reasonableness”, rather than the established test of proportionality.
Finally, and in relation to the third question, the ECJ held that the retirement provisions were not inconsistent. The fact that the provisions allowed for temporary postponement of retirement did not undermine the aim of the legislation.
For more on costs based justification of discrimination, there is an excellent note by Andrew Short QC on the Training section of our website.