Court of Justice of the European Communities
Published October 23, 2007
Palacios de la Villa v Cortefiel Servicios SA
Case C-411/05
Before V. Skouris, President and Judges P. Jann, C. W. A. Timmermans, A.
Rosas, K. Lenaerts, A. Tizzano, R. Schintgen, J. N. Cunha Rodrigues, R.
Silva de Lapuerta, M. Ilesic, P. Lindh, J.-C. Bonichot and T. von Danwitz
Advocate General J. Mazák (Opinion February 15, 2007)
Judgment October 16, 2007
Although a domestic law providing for compulsory dismissal from employment at
a set retirement age constituted direct discrimination on the ground of age,
contrary to an EC directive, it was justified if it pursued a legitimate aim
of national employment policy, such as distributing employment between
generations, and if it was appropriate and necessary for that objective.
The Grand Chamber of the Court of Justice of the European Communities so held
on a reference under article 234 EC for a preliminary ruling from the
Juzgado de lo Social No 33 de Madrid, Spain, which sought an interpretation
of Council Directive 2000/78/EC of November 27, 2000 establishing a general
framework for equal treatment in employment and occupation (OJ 2000 L303/16).
A Spanish law of 2001 provided that clauses in collective agreements providing
for the termination of contracts of employment where workers had reached
normal retirement age were lawful provided certain conditions as to social
security contributions and pension entitlement were satisfied.
The collective agreement governing employment relations between the claimant,
Felix Palacios de la Villa, and his employer, the defendant, Cortefiel
Servicios SA, contained the following clause: “In the interests of promoting
employment, it is agreed that the retirement age will be 65 years unless the
worker concerned has not completed the qualifying period required for
drawing the retirement pension, in which case the worker may continue in his
employment until the completion of that period.”
When the claimant, who had completed the pension qualifying period, reached
the age of 65, he received a letter from the defendant notifying him of the
automatic termination of his contract of employment on the ground that he
had reached the compulsory retirement age provided for in the collective
agreement.
The claimant brought an action seeking the annulment of his dismissal, on the
ground of his right not to be discriminated against on the ground of age.
The referring court sought a preliminary ruling on whether a law such as that
in issue was precluded by the principle of equal treatment in article 2(1)
of Directive 2000/78.
Article 1 of that Directive states: “The purpose of this Directive is to lay
down a general framework for combating discrimination on the grounds of ...
age ...”
Article 2 provides: “(1) ... the ‘principle of equal treatment’ shall mean
that there shall be no ... discrimination whatsoever on any of the grounds
referred to in article 1. “(2) ... direct discrimination shall be taken to
occur where one person is treated less favourably than another is, has been
or would be treated in a comparable situation, on any of the grounds
referred to in article 1...”
Article 3 provides: “(1) ... this Directive shall apply ... in relation to:
... (c) employment and working conditions, including dismissals...”
Article 6 provides: “(1) Notwithstanding article 2(2), member states may
provide that differences of treatment on grounds of age shall not constitute
discrimination, if, within the context of national law, they are objectively
and reasonably justified by a legitimate aim, including legitimate
employment policy [and] labour market ... objectives, and if the means of
achieving that aim are appropriate and necessary...”
In its judgment the Grand Chamber of the European Court of Justice held:
Recital 14 in the preamble stated that Directive 2000/78 did not affect the
competence of the member states to determine retirement age.
However, it did not preclude the application of the Directive to national
measures governing the conditions for termination of employment contracts
where the retirement age, thus established, had been reached.
Since legislation such as the law at issue affected the duration of the
employment relationship between the parties and, more generally, the
engagement of the worker concerned in an occupation, by preventing his
future participation in the labour force, it established rules relating to
conditions which came within article 3(1)(c) of the Directive, so that the
Directive was applicable to a situation such as that in point.
Further, such legislation directly imposed less favourable treatment for
workers who had reached retirement age, as compared with all other persons
in the labour force, and therefore established a difference in treatment
directly based on age, as referred to in article 2(1) and 2(2)(a).
However article 6(1) was to be considered.
The Spanish law, which allowed the inclusion of compulsory retirement clauses
in collective agreements, had been adopted, at the instigation of the social
partners, as part of a national policy seeking to promote better access to
employment, by means of better distribution of work between the generations.
While it was true, as the national court had pointed out, that the law did not
expressly refer to an objective of that kind, that fact alone was not
decisive.
It could not be inferred from article 6(1) that the lack of precision in the
national legislation as to the aim pursued automatically excluded the
possibility that it might be justified under that provision.
In the absence of such precision, it was important, however, that other
elements, taken from the general context of the measure concerned, enabled
the underlying aim of the law to be identified for the purposes of judicial
review of its legitimacy and whether the means put in place to achieve that
aim were appropriate and necessary.
In the present case, it was clear that the Spanish law was aimed at regulating
the national labour market, in particular, for the purposes of checking
unemployment.
The legitimacy of such an aim of public interest could not reasonably be
called into question, since employment policy and labour market trends were
among the objectives expressly laid down in article 6(1) of Directive
2000/78, and, in accordance with articles 2 EU and 2 EC, the promotion of a
high level of employment was one of the ends pursued both by the European
Union and the European Community.
Accordingly, such an objective was in principle to be regarded as “objectively
and reasonably” justifying, “within the context of national law”, as
provided for by article 6(1), a difference in treatment on the ground of age.
For reasons given by the court, the means employed in the present case to
achieve such legitimate aim were also appropriate and necessary. On those
grounds the Court ruled: The prohibition on any discrimination on the ground
of age, as implemented by Directive 2000/78, was to be interpreted as not
precluding national legislation such as that at issue, pursuant to which
compulsory retirement clauses contained in collective agreements were lawful
where such clauses provided as sole requirements that workers must have
reached retirement age, set at 65 by national law, and must have fulfilled
the conditions set out in the social security legislation for entitlement to
a retirement pension under their contribution regime, where (i) the measure,
although based on age, was objectively and reasonably justified in the
context of national law by a legitimate aim relating to employment policy
and the labour market, and (ii) the means put in place to achieve that aim
of public interest did not appear to be inappropriate and unnecessary for
the purpose.
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