Global

Details

  • Service: Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 12/6/2012

Germany - Discriminatory retirement payments due to age vs. disability 

December 6:   The Court of Justice for the European Union (CJEU) today issued a judgment finding that a social plan may provide for reduced compensation paid to workers approaching retirement age, but that if the early retirement is due to the worker’s disability, a reduction in the calculation can constitute a discrimination on grounds of disability—one that is prohibited by EU law. Odar v. Baxter Deutschland GMbH, C-152/11 (6 December 2012)

Read an EU release: No. 161/12 [PDF 41 KB]

Summary

An individual was employed for over 30 years by a German entity. He was recognized as being “severely disabled,” and when his employment relationship ended, he received compensation on termination under a social plan. Because he was over the age of 54 years, he received an amount lower than that to which he would have been entitled if he had not been over 54 years of age.


The CJEU today held that a prohibition under EU law against discrimination on grounds of age does not preclude rules under a social plan (like those in this case) that provide for a difference in calculating the compensation according to age.


However, the CJEU held that the prohibition under EU law, against discrimination on grounds of disability, precludes the rules at issue. As the court found, the rules have an adverse effect on the legitimate interests of severely disabled workers when the rules provide for paying to a severely disabled worker an amount of compensation on termination that is lower than the amount that would be paid to a non-disabled worker.




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