End of employment contract at reaching the age of 65?

Year of publication

2011


Edition number

195


Reference

Subdistrict Dordrecht April 14th 2011, www.rechtspraak.nl, LJN: BQ2159


Decision

In a metal industry company an employee in the position of Sales Support Manager has been employed since 1991. On July 24th 2010 the employee reaches the age of 65. Since the com-pany has to undergo a reorganization the employee is exempted from work from February 18th 2010 till July 1st 2010, the date the employee is entitled to retirement. The employer assumes that the contract will legally terminate because of the reached retirement age. The employee disagrees and asks for a declaration at the magistrate’s court stating that he is still in service after 1st or 24th July 2010, as well as for admission to resume work and for continued salary payment.

The employer primarily refers to the CAO Metalektro (the collective labour agreement for metal and electronics) that contains a provision stating that the employment contract ends at reaching the age of 65. The magistrate’s opinion, however, is that the CAO, is not applicable. During an earlier merger, the employee once became employed by a holding company and for this company the collective agreement was not applicable, even though after the merger the employee remained doing the work at the operating company that previously employed him. The fact that the holding followed the CAO does, according to the Magistrate’s Court, not imply that the employer could expect the employee to agree with the retirement dismissal as provided in the CAO. Even a reference in the employment contract to a regulation that declares the CAO applicable, is insufficient for the magistrate because the employee denies ever having received these regulations and the employer can not prove the opposite. Based on this the magistrate therefore declares that nothing has been specified between the parties about the end of the employment contract upon reaching the age of 65.

Yet the claims of the employee are rejected. The employer had in respect of retirement dis-missal also relied on the argument of common use, in particular the common use in the indus-try. This appeal is accepted by the magistrate. The magistrate refers to a decree from 1995 by the Supreme Court indicating that at that point in time it can not be said that the rule that a contract in general legally ends upon reaching the age of 65 is no longer consistent with the views of law in large sections of the population. The fact that an amendment is introduced to raise the age at which retirement pension is payable does not harm this common use, is the magistrate’s opinion.


Comments

Termination of an employment contract upon reaching the statutory retirement age is not in itself prohibited age discrimination, because in this case an exception is made in the law. Whether this implies that the contract will automatically terminate upon reaching that age is a question about which case law is divided. Employers who want a contract to legally end when reaching the statutory retirement age, would do well to include a specific provision in the em-ployment contract (even though the validity of such a provision is not undisputed). If this habit can serve as a source of law implying the end of the employment contract upon reaching the statutory retirement age, is in spite of the judgement of the Magistrate’s Court in this case, far from certain.



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