A social plan may provide for a reduction in the redundancy compensation paid to workers approaching retirement age. Such a measure does not run counter to a ban on any discrimination based on age, says the EU Court of Justice (ECJ). It may be justified by the objective of granting compensation for the future, protecting younger workers and facilitating their reintegration into employment, whilst taking account of the need to achieve a fair distribution of limited financial resources in a social plan.
The ECJ delivered its ruling on 6 December 2012 in Case C-152/11 after a request from a German court. At issue is a social plan concluded by the German undertaking Baxter and its works council, which provides that the amount of compensation paid to workers made redundant on operational grounds is contingent, in particular, on the length of their service in the undertaking (standard formula compensation). However, the plan also provides that, for workers over 54 years of age, the amount of compensation is calculated according to the earliest possible beginning of pension (special formula compensation). The amount to be paid to those workers is lower than the amount obtained using the standard formula, although it must be equal to at least half of that amount.
DISCRIMINATION BASED ON DISABILITY
A 54-year-old and seriously disabled Baxter employee, who had worked at the company for over 30 years, filed a complaint. In addition to claiming that he was being discriminated against because of his age, he criticised the social plan for discriminating against him on the...