Facts

Until 31 December 2011, Hungarian law allowed judges, prosecutors and notaries to remain in office until age 70. This was an exception to the rule applying to all other public sector employees, who were forced to retire at age 62.
In  April  2011,  Parliament  adopted  a  law  under  which  judges, prosecutors  and  notaries  would  not  be  allowed  to  remain  in  office beyond the ‘general retirement age’, being the age at which persons are eligible to receive State retirement benefits. This used to be 62, but in 2010 a law entered into force under which the general retirement age is gradually being increased from 62 to 65. 
The  law  reducing  the  compulsory  retirement  age  for  judges, prosecutors  and  notaries  contained  transitional  provisions  pursuant to which officials who reach the general retirement age before 2012 lose their office on 30 June 2012 and officials who reach the general retirement age in the course of 2012 lose their office on 31 December 2012.
In January 2012, the European Commission (EC) notified Hungary that it was in breach of Directive 2000/78. When Hungary denied this, the EC sent Hungary a ‘reasoned opinion’ requesting Hungary to comply with Directive 2000/78 within one month. Hungary took the position (i) that the retirement age reduction was not discriminatory as it merely redressed a situation where there had been positive discrimination in favour of judges, prosecutors and notaries and (ii) that, even if there was  discrimination,  it  was  justified  by  two  objectives:  (a)  the  desire to standardise the age-limit for compulsory retirement in the public sector while ensuring the viability of the pension scheme, a high level of employment and the improvement of the quality and efficiency of the  judicial  activities  involved  and  (b)  the  establishment  of  a  “more balanced  age  structure”  facilitating  access  for  young  lawyers  to  the relevant professions and guaranteeing them an accelerated career.In  July  2012  the  Constitutional  Court  repealed  the  discriminatory provisions retroactively.

ECJ’s findings

1.   The fact that the Constitutional Court repealed the legislation at issue retroactively does not do away with the need to adjudicate on the action, because that legislation was still in force at the time the deadline laid down in the EC’s reasoned opinion expired (§ 40 – 47).
2.   Was the legislation at issue discriminatory? Individuals aged 62 and over are in a comparable situation to that of younger individuals, but  unlike  the  latter  they  are  forced  to  retire  at  an  earlier  age. This is not altered by the fact that the legislation aims to redress a situation of positive discrimination (§ 48 – 54).
3.   Is  the  legislation’s  aim  legitimate?  The  ECJ  replies  affirmatively. Aims  are  legitimate  within  the  meaning  of  Article  6  of  Directive 2000/78, if they consist of social policy objectives, such as those related to social policy, the labour market or vocational training. Standardisation  can  constitute  a  legitimate  employment  policy objective.  Establishing  a  more  balanced  age  structure  can constitute  a  legitimate  aim  of  employment  and  labour  market policy, as the ECJ previously held in Fuchs and Köhler (§ 57 – 62).
4.   The legislation at issue is an appropriate means of achieving the aim of standardisation, but is it necessary to achieve that aim? The ECJ replies negatively. Judges, prosecutors and notaries previously benefitted from an exception to the general retirement age allowing them  to  remain  in  office  until  age  70.  They  had  a  well-founded expectation that they would be able to remain in office, retaining their income, until that age. The legislation at issue abruptly and significantly  lowered  the  age  for  compulsory  retirement  without introducing  transitional  measures  to  protect  this  legitimate expectation.  Officials  born  in  or  before  2012  had  a  period  of  at most one year, but in the majority of cases much less, to adjust to  lower  incomes.  Furthermore,  Hungary  has  not  explained  why it lowered the retirement age of judges, prosecutors and notaries by eight years without providing for a gradual staggering of that amendment, while, on the other hand, the increase of three years in the general retirement age is being introduced from 2014 over a period of eight years and was already enacted in 2010 (64 – 75).
5.   Is the legislation at issue an appropriate means to achieve the aim of establishing a more balanced age structure? The ECJ replies in the  negative.  The  short-term  effect  of  vacating  numerous  posts in  favour  of  younger  lawyers  will  not,  in  itself,  result  in  a  truly balanced age structure in the medium and long term. In 2013, only one age group will have to be replaced and as the retirement age is raised progressively from 62 to 65 and the prospects for young lawyers will actually deteriorate.

Ruling

[…] by adopting a national scheme requiring compulsory retirement of judges, prosecutors and notaries when they reach the age of 62 – which gives rise to a difference in treatment on grounds of age which is not proportionate as regards the objectives pursued – Hungary has failed to fulfil its obligations under Articles 2 and 6(1) of Council Directive 2000/78/EC […]