We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
15 June 2011
The Supreme Court has recently re-examined the criteria that may be applied to redundancies where an employer has no alternative to dismissal.
An employer reached an agreement with the relevant trade unions whereby the employees to be made redundant would be chosen from among those eligible for pension benefits. The employees who were dismissed contested the decision to terminate on this basis, claiming that it was discriminatory. The employees won their case at first instance and on appeal. However, the employer appealed to the Supreme Court, which held that the dismissals were lawful.
The court referred to three previous decisions(1) in stressing the legitimacy of the agreement reached between the employer and the trade unions, and of the criterion used to select employees for redundancy. It stated that the criterion in question did not necessarily select the oldest employees, as in some cases an older employee may not meet the requirements for retirement benefits for reasons related to his or her career path or professional experience, whereas a younger colleague may do so. Moreover, the court stated that such criteria help to reduce the social impact of dismissals by terminating employees who are entitled to receive pension benefits.
The decision is particularly significant because it follows certain recent decisions at EU level(2) concerning the principle of equal treatment on employment terms and working conditions, as set out in the EU Employment Framework Directive (2000/78/EC).(3)
The court stated that dismissing employees based on their eligibility for pension benefits, as agreed with the trade unions at the end of the redundancy procedure, does not conflict with the anti-discriminatory aims of national and EU law. Rather, it has the lawful aim of reducing the social impact of dismissals. The court stated that the criterion did not constitute unjustified inequality of treatment, but was fair, rational and equitable, granting all employees the same conditions of access to, and presence in, the job market.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.