The Supreme Court has ruled that the compulsory retirement age of 67 practiced by insurance company Gjensidige did not violate the prohibition against age discrimination in the Working Environment Act Chapter 13.
Compulsory retirement age schemes in the individual undertaking have a long tradition in the Norwegian labour market. Such schemes have been accepted provided that they have been made known to the employees and practiced consistently and that satisfactory occupational pension benefits have been provided for the employees upon termination.
Although these requirements were undoubtedly met, a female senior customer advisor sued Gjensidige, claiming that the scheme violated the prohibition against age discrimination in the Working Environment Act section 13-1 (1). The prohibition allows for exemptions in section 13-3 (1), however, provided that the discrimination has a justified purpose and is not disproportionately restrictive for the employees.
The senior customer advisor had submitted that the scheme must be assessed based on Gjensidige’s internal justification of the scheme. The Supreme Court disagreed and found that a less narrow assessment had to be made. Instead, the Court found that the assessment should be based upon whether or not the political authorities had accepted such schemes and whether the assessment of the authorities had a legitimate purpose.
The Supreme Court accepted that socio-political considerations constituted a legitimate purpose and emphasized the need for distributing work between generations, a wide-spread wish among many employees to retire at 67 and the need for foreseeability for employers. As the compulsory retirement age in Gjensidige was combined with a very attractive occupational pension, the Supreme Court found that the retirement age was appropriate and necessary to achieve these purposes. The Court did not assess whether other considerations could make the age discrimination disproportionately restrictive for the employees.
Section 15-7 of the Working Environment Act provides that termination of employment before the age of 70 based solely on the employee reaching the general retirement age under the National Insurance Scheme (67 years) will not be lawful. This provision is generally understood to mean that termination on the grounds of age alone will be warranted once the employee has turned 70.
It follows from the Supre Court’s ruling that employers who wish to implement a compulsory retirement age for their employees may do so provided that the retirement age is set at 67 years or older and that the general requirements for such schemes in the form of consistency etc. are met. In some cases such as for airline pilots, firemen etc. a compulsory retirement age for employees younger than 67 will continue to be accepted. It remains to be seen, however, whether such schemes will be deemed lawful for employees younger than 67 in ordinary undertakings.
