Cases A-Z contains a brief summary of key pensions cases, arranged alphabetically.
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Vasil Ivanov Georgiev v Tehnicheski universitet – Sofia, filial Plovdiv (European Court of Justice) - 18 November 2010
In this case, the ECJ ruled that a Bulgarian national law which provides for the compulsory retirement of university professors at age 68, and for the extension of employment contracts beyond the age of 65 only by means of fixed-term contracts, was capable of being justified. It also considered that the delivery of quality teaching and the optimum allocation of posts between staff from different age groups within the university were potential legitimate aims.
The Framework Directive on Equal Treatment in Employment and Occupation (the Framework Directive) prohibits direct and indirect discrimination on grounds of age. However, under Article 6(1) of the Framework Directive, Member States “may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives and if the means of achieving that aim are appropriate and necessary.”
Similarly, the Framework Agreement on Fixed-Term Work was designed to prevent less favourable treatment of workers on fixed-term contracts (compared to permanent employees) unless that treatment can be objectively justified.
Mr Georgiev (G) began work as a lecturer at the Technical University of Sofia, Plovdiv Branch (the University) in 1985. The retirement age at the university was age 65. However, for lecturers, employment could be extended for up to two additional years, or three years in the case of professors.
G’s employment contract was terminated with effect from 6 February 2006 as he had reached the retirement age of 65. He was, however, authorised to continue working and a new contract was agreed for an initial period of one year, and later extended for a further year. In January 2007, G was appointed to the post of professor and in January 2008 his contract was extended for a further year.
In 2009 (the year in which G attained age 68), his employment was terminated in accordance with the Bulgarian Labour Code.
G brought two actions before his national court in which he sought to establish that the clause which limited his fixed-term contract to one year was null and void and that his contract should be reclassified as one of indefinite duration. He also challenged the University’s decision to terminate his contract once he reached age 68.
As a result, several questions on the application of the Framework Directive were referred by the Bulgarian court to the ECJ:
- Can national law prevent contracts of indefinite duration for professors after the age of 65?
- Can professors who have reached the age of 68 be compulsorily retired?
- If there is a conflict between the Framework Directive and existing national legislation, should the national legislation be disapplied?
Both the University and the Bulgarian government submitted that the national legislation pursued a social policy aim which was linked to the training and employment of teaching staff. They also contended that the aim was linked to the application of a specific labour market policy which takes account of the specific situation of the staff in the discipline concerned, the needs of the university establishment under consideration and the professional abilities of the person covered. It did not, however, specify the aim of that national legislation and, in essence, merely stated that it pursued the type of aim referred to in the Framework Directive.
The Court held that the Bulgarian national legislation which:
- permitted a compulsory retirement age of 68; and
- only permitted working beyond age 65 by means of fixed-term one-year contracts which were renewable at most twice;
was not in contravention of the Framework Directive, provided that the legislation pursues a legitimate aim which is linked, among other things, to employment and labour market policy. This aim could, for example, be “the delivery of quality teaching and the best possible allocation of posts for professors between the generations” where the legislation makes it possible to achieve that aim by appropriate and necessary means.
In addition, the ECJ confirmed that it was for the Bulgarian court to determine whether these conditions were satisfied. The Court also confirmed that, under the principle of direct effect, in a dispute between an individual and a public institution (the University), if the national legislation did not meet the conditions of the Directive, the national court must decline to apply that legislation.
The case has been remitted to the Bulgarian court.
Given the current review which is underway in the UK of the default retirement age of 65, cases which consider the objective justification for compulsory retirement are of increasing interest for employers.
While it will be up to the Bulgarian national court to determine whether the University’s practices can be objectively and reasonably justified by a legitimate aim, the case is useful in helping to build up a collection of potentially legitimate aims.