This summary of age discrimination law in the Netherlands has been prepared by Bronsgeest Deur Advocaten, the Ius Laboris member for the Netherlands: www.bd-advocaten.nl/en-gb/
The Constitution of the Netherlands (article 1) contains a general prohibition on discrimination. This article forms the basis of all Equal treatment legislation in the Netherlands. As per 1 May, 2004, the Netherlands has implemented EU Framework Directive 2000/78/EC by means of the Equal Treatment in Employment (Age Discrimination) Act (“ETEA”) (”Wet gelijke behandeling op grond van leeftijd bij de arbeid”). This act prohibits direct and indirect distinction in employment relations on the basis of age, which also covers intimidation. The scope of the ETEA encompasses: recruitment, selection and appointment of personnel, employment-finding, employment conditions, promotion and dismissal. The ETEA is also applicable to vocational secondary education (beroepsvoorlichting), career guidance, career orientation and the membership of employer/employee organisations and/or occupational group(s).
In the Netherlands there are two specific situations in which age discrimination is allowed. The first one is a positive discrimination policy in order to encourage the representation of certain age groups in employment. The second one is the possibility for employers to terminate the employment contract of an employee as from the month he/she reaches the state pension age.
Other exceptions to the ETEA are only allowed if based on an objective justification. This objective justification must comply with the requirements of legitimacy, efficiency and proportionality. To comply with the requirement of legitimacy, the employer must have a legitimate aim or purpose for the discrimination. The measures for reaching the purpose should be efficient, proportional and necessary. The legitimate aim of the employer must not be able to be fulfilled by means of another, non discriminatory measure.
The ETEA covers all employees as well as public servants and professional practitioners. There is no specific group excepted from the scope of the ETEA. It is possible to deviate from the ETEA for a specific group of employees, however again only if this deviation is based on objective justification.
What enforcement/remedies exist?
Provisions in agreements which conflict with the ETEA are void as a matter of law. An employee or their representative (such as the Works Council), may file a complaint of discrimination against the employer at the Human Rights Commission (HRC, in Dutch “College voor de Rechten van de Mens”). The HRC is an independent body which operates nationwide. The HRC will determine whether there is discrimination on the basis of age being made and, if appropriate, whether this discrimination is based on an objective justification.
The employer is also free to ask the HRC's opinion about a policy in advance in order to check if the policy is in conflict with the ETEA or not.
The HRC’s judgment is not binding for the parties involved. Besides filing a complaint at the HRC, the parties can go to Court. The Court is not bound by the judgement of the HRC either. But in most cases, these judgments will be followed by the employer because of the HRC's strong reputation.
There are no criminal sanctions foreseen in the ETEA.
How common are claims?
As of the implementation of the ETEA in May 2004, there have been hundreds of age discrimination claims filed at the Commission for Equal Treatment (the predecessor of the HRC until October 2012) against employers. In total the Commission has dealt with over 1,000 claims.
In comparison with the other forms of discrimination, age discrimination represents one of the most frequent claims before the Commission.
In Court, age discrimination claims in employment relationships are significantly less common. Most employees find their way to the HRC because this procedure is free of charge.
What claims are most common and what are trickiest issues for employers?
There is a big age discrimination problem in relation to Social Plans and/or Collective Labour Agreements. For example most Social Plans contain arrangements for severance payments for the employees. For older employees (mostly 55+) there are usually different arrangements stating that they will not be entitled to a severance payment, but will receive a supplementary payment on their Social Security benefits for the period up to their pension date. The HRC has already made findings that these arrangements discriminate older employees on the basis of age and in most cases there is no objective justification applicable.
Claims brought by employees on the basis of age limits in job vacancies are also common. For example, a supermarket which had a policy to only hire employees under the age of 20 because they are entitled to lower wages. This is directly in conflict with the ETEA and, according to the Commission, has no objective justification. The policy is of course effective, however does not comply with the conditions of legitimacy and proportionality. Also, asking for experience can be considered as (in)direct age discrimination.
Are there any specific exceptions in your laws?
There are two specific exceptions allowed in the ETEA. The first one is that the prohibition on distinction on the basis of age is not applicable if the distinction provides in an employment policy which stimulates the employment of certain age categories. This policy must be determined by law.
The second one is that the employer is allowed to terminate the employment contract as from the day the employee reaches the state pension retirement age. There is compulsory retirement in the Netherlands and there is no requirement that the employer demonstrate objective justification in these retirement cases.
Dismissal on the basis of age is only specifically allowed when the employee reaches the state pension retirement age. If the contractual pension-age is set before the age of the state pension retirement age, this has to be based on an objective justification and thus comply with the requirements of legitimacy, efficiency and proportionality. The objective justification is being applied very strict and there are very few examples in which an earlier pension-age is allowed. For example, circulation of personnel and decrease of motivation when getting older, do not count as reasons for objective justification.
In the Netherlands the Cantonal Court Formula remains a hot topic for discussions in employment law. The Cantonal Court Formula is the formula which the Cantonal Court in the Netherlands applies to determine the amount of severance payment when dissolving an employment contract. Since 1 January 2009 the formula is as follows:
A x B x C, for which:
A = number of years of service
B = employee's monthly gross salary
C = correction factor
For determining the number of years of service (the A Factor of the Cantonal Court Formula), the employee's age is relevant, whereby every year of service until the age of 35 counts as 0.5, every year of service from the age of 35 up until the age of 44 counts as 1, every year of service from the age of 45 up until the age of 54 counts as 1.5 and every year of service as of the age of 55 counts as 2. These factors are applied cumulatively.
In 2006 the Union AVV (”Alternatief voor Vakbond”) filed a request at the Commission of Equal Treatment to judge whether the “Cantonal Court Formula” is in accordance with the ETEA. The Union stated that the formula directly and indirectly discriminates on the basis of age. It constitutes direct discrimination because, dependent on his age, the employee is entitled - due to the multiplying factors - to a right to a higher severance payment. It constitutes indirect discrimination because the amount of severance depends on the number of years of service and older employees usually have more years of service.
According to the Union, this Cantonal Court Formula added to discriminatory arrangements for older employees in Social Plans (in cases of a company’s intention of collective redundancy due to downsizing, mergers or acquisitions often a social plan is made together with the unions, regulating the consequences thereof for the employees affected) and Collective Labour Agreements and points towards a negative image of older employees. The prejudices on older employees as being more expensive, less flexible and unhealthy, are being maintained. The Commission, however, declared that it did not have the ability unauthorised to review the Cantonal Court Formula because this does not fall under the scope of the ETEA.
In recent years similar requests were filed at the district courts in the Netherlands, mostly for age discrimination due to companies applying the Cantonal Court Formula in Social Plans. District courts in the Netherlands were divided on the sustainability of the A Factor of the Cantonal Court Formula in the light of age discrimination. To bridge the distinction made between young and old(er) employees when calculating severance payments due, some Cantonal Courts have been known to apply a different calculation method. The basic principle thereof is that an employee of the age of 50 or older who enters into an employer’s service, shall not be entitled to a severance payment equal to 2 monthly salaries per year of service upon termination (under the ‘old’ Cantonal Court Formula, which was applied before 1 January 2009, age groups where divided differently). The general idea of the aforementioned calculation method was that the often vulnerable position for such elderly employees on the job- market should not expressed in the A Factor, but should be corrected in a higher C Factor. Opponents state that the indirect age discrimination made by the A Factor of the formula – rewarding seniority – can be justified by the fact that loyalty to an employer should be rewarded. Since the introduction of the new Cantonal Court Formula the method is hardly applied anymore, so that the division between courts on the sustainability of the A Factor in the light of age discrimination seems to have faded somewhat. On an academic level, however, the discussion continues.
Other interesting cases that relate to age discrimination are court decisions on the mandatory early retirement of pilots of airline companies (Martinair and KLM). Recently, in December 2012, the Dutch Supreme Court decided on those cases. The applicable Collective Labour Agreements stipulate a specific age at which pilots retire (56), whereby a distinction is made between pilots (for whom the CLA applies) and other employees, who shall not retire until the age of the state pension retirement age (except in the case of early retirement on a voluntary basis). The courts examined whether the parties to the CLA (Marinair/KLM and the unions) had legitimate motives to justify the distinction made. The main reason given by the airline companies and unions to justify the earlier retirement age of the pilots was the need to maintain staff turnover: the whole career structure of pilots is based on the fact that is possible for all pilots to enter into the highest position (and salary scale) prior to their retirement. By keeping pilots employed on the highest positions after the age of 55, staff turnover would stagnate and younger employees would be unable to reach the highest positions. According to the courts, the distinction on the basis of age was indeed based on an objective justification.