Facts

Torsten Hörnfeldt was a postal worker. When he turned 67, his contract ended  pursuant  to  the  “67-year  rule”  under  Swedish  law.  This  rule provides that (i) all employees have the right to remain employed until the end of the month in which they reach the age of 67 and that (ii) employment  contracts  terminate  automatically  at  that  age,  provided the employer gives one month’s notice. Mr Hörnfeldt, who had worked part-time for many years, received monthly retirement benefits that were  lower  than  he  considered  sufficient.  He  brought  proceedings seeking to annul the termination of his contract on the ground that the 67-year rule constitutes unlawful age discrimination.

National proceedings

The court, basing its findings on, inter alia, Mangold, took the view that the 67-year rule was age discriminatory and referred to the ECJ the question of whether the difference of treatment could be regarded as objectively justified, noting that no explanation of specific grounds for the unconditional right given to an employer to dismiss an employee at age 67 is to be found in the preparatory documents relating to the 67-year rule and that that right is independent of the amount of pension to which the employee is eligible.

ECJ’s findings

1.   It cannot be inferred from Article 6(1) of Directive 2000/78 that a lack of precision in the national legislation as regards the aim pursued has the effect of automatically excluding the possibility that that legislation may be justified. In the absence of such precision, it is important that other elements, derived from the general context of the measure concerned, should make it possible to identify the underlying aim of the measure and whether the means put in place to achieve it are appropriate and necessary (§ 24).
2.   As for the aim of the 67-year rule, the Swedish government argued that that rule seeks (i) to avoid termination of employment contracts in  situations  which  are  humiliating  for  workers  by  reason  of  their advanced age; (ii) to enable retirement pension regimes to be adjusted to  rules  that  came  into  effect  in  1996;  (iii)  to  reduce  obstacles  for those who wish to work beyond age 65; (iv) to adapt to demographic developments and to anticipate the risk of labour shortages; (v) to establish a right, and not an obligation, to work until age 67; and (vi) to make it easier for young people to enter the labour market (§ 26).
3.   The ECJ has held that the automatic termination of the employment contracts of employees who meet the conditions as regards age and pension contributions has, for a long time, been a feature of employment law in many Member States. It is a mechanism based on  the  balance  to  be  struck  between  political,  economic,  social, demographic  and/or  budgetary  considerations  and  the  choice  to be made between prolonging people’s working lives or, conversely, providing for early retirement (§ 28).
4.   Encouragement  of  recruitment  undoubtedly  constitutes  a legitimate  aim  of  Member  States’  social  or  employment  policy, in particular when the promotion of access of young people to a profession is involved (§ 29). 
5.   Therefore,  aims  such  as  those  described  by  the  Swedish Government  must,  in  principle,  be  regarded  as  objectively  and reasonably justifying a difference in treatment on the grounds of age such as that provided by the 67-year rule (§ 30). 
6.   In  the  light  of  the  broad  discretion  granted  to  Member  States to  choose  to  pursue  a  particular  aim  and  to  define  measures  to implement  it,  it  does  not  appear  unreasonable  to  take  the  view that a measure such as the 67-year rule may be appropriate for achieving the aims set out above (§ 32).
7.   In order to examine whether the 67-year rule goes beyond what is necessary for achieving its objective, it must be viewed against its legislative background and account must be taken both of the hardship that it may cause to the persons concerned and of the benefits  derived  from  it  by  society  in  general.  Relevant  factors in this regard are the fact that in Sweden (i) employees have the unconditional  right  to  continue  in  their  profession  until  age  65; (ii)  the  67-year  rule  does  not  establish  a  mandatory  scheme  of automatic  retirement,  in  that  the  parties  may  agree  to  continue their  relationship  beyond  age  67,  if  so  desired  on  the  basis  of  a fixed-term contract; (iii) the 67 year rule takes account of the fact that the worker is entitled to a pension; and (iv) persons who cannot obtain an adequate pension are eligible for basic benefits (§ 38-44). 
8.   In  Rosenbladt  the  ECJ  accepted  a  lower  retirement  age  and  Ms Rosenbladt’s retirement pension was significantly lower than that of Mr Hörnfeldt (§ 45)

Ruling

The second subparagraph of Article 6 (1) of Council Directive 2000/78 […] must be interpreted as not precluding a national measure, such as that at issue in the main proceedings, which allows an employer to terminate an employee’s employment contract on the sole ground that  the  employee  has  reached  the  age  of  67  and  which  does  not take account of the level of the retirement pension which the person concerned will receive, as that measure is objectively and reasonably justified by a legitimate aim relating to employment policy and labour-market policy and constitutes an appropriate and necessary means by which to achieve that aim.