C-411/05, Palacios de la Villa

In this case, Mr Palacios claimed that his dismissal on the ground that he had attained the compulsory retirement age laid down in a collective agreement was unlawful.

Mr Palacios, born on 3 February 1940, was an organisational manager who worked for the undertaking Cortefiel Servicios SA since 17 August 1981.

On 18 July 2005, Cortefiel Servicios SA informed Mr Palacios by letter of his dismissal on the basis that he satisfied all the requirements laid down in Article 19 of the Collective Agreement, which provided:

“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.’

If Mr Palacios had retired on 18 July 2005, he would have been entitled to receive from the social security scheme a retirement pension amounting to 100% of his contribution base of EUR 2 347.78, without prejudice to the maximum limits laid down in law.

Mr Palacios claimed that his dismissal was void for breach of fundamental rights. He argued that he was discriminated against because he had reached the age of 65 and challenged directly the letter of dismissal.

The referring Court asked whether the prohibition of discrimination on the grounds of age as laid down, in particular, in Article 2(1) of Council Directive 2000/78 establishing a general framework for equal treatment in employment and occupation, precluded a national law allowing compulsory retirement clauses to be included in collective agreements.

In the event of an affirmative answer, the referring court also wished to know if it was required to disapply the national law concerned.

The Court first of all found that Directive 2000/78 was applicable to the present situation, because the legislation at issue in the main proceedings 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.

The Court pointed out that the aim of Directive 2000/78 was to combat certain types of discrimination, including discrimination on grounds of age, as regards employment and occupation with a view to putting into effect in the Member States the principle of equal treatment.

It held that the national legislation at issue directly imposed less favourable treatment for workers who had reached that age as compared with all other persons in the labour force.

Such legislation therefore established a difference in treatment directly based on age, as referred to in Article 2(1) and (2)(a) of Directive 2000/78.

The Court, however, reiterated that encouragement of recruitment constituted a legitimate aim of social policy. (see, in particular, Case C‑208/05, ITC [2007], paragraph 39).

It argued that that assessment must evidently apply to instruments of national employment policy designed to improve opportunities for entering the labour market for certain categories of workers.

Therefore, an objective such as that referred to by the legislation at issue must, in principle, be regarded as ‘objectively and reasonably’ justifying ‘within the context of national law’, as provided for by the first subparagraph of Article 6(1) of Directive 2000/78, a difference in treatment on grounds of age laid down by the Member States.

The Court furthermore reiterated that Member States and, where appropriate, the social partners at national level enjoyed broad discretion in their choice, not only to pursue a particular aim in the field of social and employment policy, but also in the definition of measures capable of achieving it (see, to that effect, Case C‑144/04 Mangold [2005], paragraph 63).

The Court held that it did not appear unreasonable for the authorities of a Member State to take the view that a measure such as that at issue in the main proceedings might be appropriate and necessary in order to achieve a legitimate aim in the context of national employment policy, consisting in the promotion of full employment by facilitating access to the labour market.

In the light of those factors, it could not reasonably be maintained that national legislation such as that at issue in the main proceedings was incompatible with the requirements of Directive 2000/78.

The Court found that there was no further need to give a ruling in relation to Article 13 EC – also referred to in the preliminary questions – on the basis of which that directive was adopted.

Text of Judgment