The forced early retirement of certain professionals constitutes, in certain circumstances, unjustified discrimination on the basis of age, the Court of Justice of the European Union has recently confirmed. Any national laws which drastically and abruptly lower the retirement age for a sector of the working population could be in breach of EU law.

EU law prohibits both direct and indirect discrimination at the workplace on the basis of age. However, the CJEU has on a number of occasions conceded that, at times, differences of treatment based on age are justifiable by a legitimate aim if the means to reach that aim are proportionate. EU law provides that differences in treatment on grounds of age are permissible when they are objectively and reasonably justified by a legitimate labour market aim and are appropriate and necessary to the achievement of that aim. This means member states can set age limits for mandatory retirement only on the basis of objective and proportionate justifications.

The recent ruling given by the CJEU concerned Hungarian law. Hungary enacted a law which lowered the mandatory retirement age for judges, prosecutors and public notaries from 70 to the general Hungarian retirement age of 62, and this within a very short transition period. This meant that judges and prosecutors who reached 62 before January 1, 2012, were obliged to retire on June 30, 2012, while those who reached that age between January 1, 2012, and December 31, 2012, were obliged to retire on December 31, 2012. From January 1, 2014, notaries were also obliged to retire when they reached the general retirement age of 62.

The European Commission considered such measures to constitute discrimination on the basis of age and to be in breach of EU law. To this end, it launched infringement proceedings against Hungary and referred the case to the CJEU.

The court confirmed that the compulsory retirement of judges, prosecutors and notaries who reached 62 constitutes a difference in treatment based on age since younger people in the same professions could carry on working. However, as in previous cases, it pointed out that member states may quote legitimate social policy objectives, related to employment policy, the labour market or vocational training, to justify certain measures which could be considered to be discriminatory. In its defence, Hungary asserted that such a compulsory retirement was necessary to standardise the age-limits for retirement for public sector professions and to establish a more balanced age structure facilitating access for young lawyers to the professions concerned.

The court noted that, before January 1, 2012, the people affected by the contested legislation had been able to remain in office until the age of 70. This gave rise, in their regard, to a well-founded expectation that they would be able to remain in office until that age. The new Hungarian law abruptly and significantly lowered the age-limit for compulsory retirement, without providing for transitional measures in order to safeguard the legitimate expectations of these persons. The persons affected by the contested legislation became suddenly obliged to leave the labour market definitively, without having had the time to take the necessary economic and financial measures to prepare for such retirement.

The CJEU also remarked that there was a contradiction between the immediate lowering of the retirement age for these professions by eight years, and the increase of the general age of retirement for the general pension scheme by three years from 62 to 65, the latter to be carried out with effect from 2014 over a period of eight years. In practical terms, this meant that the interests of those judges, prosecutors and notaries affected by the lowering of the age-limit were not taken into account in the same way as those of other public sector employees for whom the retirement age-limit had been increased.

The court failed to accept the other justification put forward by Hungary, namely, that the new legislative measure was intended to attain a more balanced age structure.

Indeed, the court noted that, while the national legislation could, in the short term, facilitate the access of young lawyers to the professions concerned, these positive effects would not be sustained in the long term. The court observed that the rate of turnover would become slower and slower as the age-limit for compulsory retirement is raised progressively from 62 to 65, even leading to a deterioration in the prospects for young lawyers to enter the professions of the judicial system.

The implications of this judgment are far-reaching since it clearly impacts member states’ discretion to take arbitrary and drastic measures in setting the retirement age for a certain sector of the workforce.

mariosa@vellacardona.com

Mariosa Vella Cardona is deputy chairperson of the Malta Competition and Consumer Affairs Authority and a member of the National Commission for the Promotion of Equality.

Article from Times of Malta