The Norwegian Supreme Court vs. the EFTA Court – who decides?
As a result of the Norwegian Supreme Court's ruling in a case concerning general application of a collective yard agreement the competence of the EFTA Court has been challenged, and a conflict seems to be developing between the Norwegian Supreme Court and the EFTA Court. The Norwegian Supreme Court set a side the Advisory Opinion of the EFTA Court as it made its own interpretation of EEA law – and passed a completely opposite judgement.

In March 2013 the Norwegian Supreme Court pronounced its judgment in a case concerning so-called general application of a Norwegian collective yard agreement. The material findings of the Supreme Court were that the general application of the collective yard agreement did not violate EEA law and the freedom to provide services in the Internal Market under Article 36 of the EEA Agreement. A summary of the material aspects of the judgment is given in our news item ``General application of collective yard agreement does not violate EEA law``.

The purpose of the EEA Agreement between the European Union and the three EFTA members Norway, Iceland and Luxembourg is to include the three states in the Internal Market under the Four Freedoms by way of implementing relevant EU Internal Market legislation in the national legislation of the three EFTA states.

In order to maintain a uniform interpretation and application of EU law also within the three EFTA states, the EEA Agreement provides for the establishment of the EFTA Court and procedures under which the three EFTA states can ensure a uniform application of EU law also in the three EFTA states. However, since the three states are not EU members, the national courts in the three states remain independent and will adjudicate in the last instance.

As a consequence of EEA Agreement the three EFTA States agreed between them to establish the EFTA Court with authority i.a. to give Advisory Opinions. Article 34 of the Surveillance and Court Agreement (which established the EFTA Court) reads as follows:
``The EFTA Court shall have jurisdiction to give advisory opinions on the interpretation of the EEA Agreement.``

The role of the EFTA Court is thus to give Advisory Opinions when asked by national courts of the three member states who are in doubt as to whether national legislation may be in breach of EU law.

The findings of the Norwegian Supreme Court in the collective yard agreement case were somewhat surprising as the EFTA Court had provided an Advisory Opinion on the matter and concluded that general application of the collective yard agreement did violate EEA law and the freedom to provide services. The preceding interpretation in the Advisory Opinion provided by the EFTA Court had left little room for the national court to apply the interpretation on the facts of the case and then to pass its own judgement. Instead the EFTA Court used the facts of the case to illustrate the interpretation of EEA law. As many saw it, by doing this the EFTA Court did in practice determine the outcome of the case.

On the one hand, an ``advisory opinion`` indicates that the statement given by the EFTA Court is something other than a binding judgment. On the other hand, the Norwegian Supreme Court has previously held that Advisory Opinions shall be given significance importance when national courts consider cases regarding EEA law and so far, the difference between binding judgments and Advisory Opinions has not really been put to the test.

In its ruling the Norwegian Supreme Court clearly set aside the EFTA Court's Advisory Opinion and stated that national courts are free to make their own assessment of the interpretation of EEA law even when an Advisory Opinion has been obtained from the EFTA Court.

Prior to the Supreme Court’s decision there had been political unrest in Norway and signals had been sent from within the Norwegian Confederation of Trade Unions that their support for the EEA Agreement might be withdrawn if the Supreme Court were to rule in accordance with the EFTA Court’s Advisory Opinion. The Supreme Court found that the national Norwegian provisions in question were justified under the under the need for social protection of workers and public order but it is uncertain whether the court attached any weight to the political unrest that had come to surface.

The judgment of the Supreme Court has caused debate as to whether or not the EFTA Court has the final say in determining the interpretation of EEA law. In an article in the Norwegian legal journal Lov og Rett (Law and Justice no. 8 2013) Dr. Carl Baudenbacher, President of the EFTA Court, criticised the Supreme Court’s judgment. Behind a cautious and objective legal language Mr. Baudenbacher expressed in no uncertain terms his concerns over the potential consequences of the judgment.

Dr. Baudenbacher pointed out that if national courts have competence to overrule the Advisory Opinions of the EFTA Court, different interpretations may arise. In turn, this can challenge the uniformity of the Internal Market. Furthermore, he pointed to Article 31 of the Surveillance and Court Agreement, which provides that if an EFTA State has failed to fulfil an obligation under the EEA Agreement, then ESA (EFTA's Surveillance Authority) may ultimately bring the EFTA state in question before the EFTA Court.

Following the Supreme Court's ruling in the collective yard agreement case, ESA has received a complaint over the Norwegian State. The Norwegian government is now considering the complaint before the complaint is returned to ESA for further consideration.

Compulsory retirement at 67 is lawful
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.