Dismissal of an employee with a reduced-hours job who reached the statutory retirement age did not constitute unlawful discrimination

The Danish Supreme Court has established that an employer’s dismissal of a disabled employee with a publicly funded reduced-hours job when he reached the mandatory retirement age and the public funding lapsed did not conflict with the Anti-Discrimination Act.

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When an employee with a reduced-hours job reaches the statutory retirement age, the public funding relating to the job ends. However, according to the Anti-Discrimination Act employers must not discriminate against employees on grounds of age or disability.

In this case, the question before the Supreme Court was whether the dismissal of an employee with a reduced-hours job based on the lapse of public funding constituted discrimination in breach of the Anti-Discrimination Act, or whether the dismissal was in conflict with the Act on Part-Time Work and the Salaried Employees Act.

The case concerned an employee with a reduced-hours job. He worked 20 hours a week in a white-collar position at a company. The local authorities paid two-thirds of the costs for the reduced-hours working scheme through a wage subsidy to the company. The employer dismissed the employee when he reached the statutory retirement age, referring to the lapse of the agreement on reduced-hours working with the local authorities. The employee, however, wanted to continue working for the employer in a position where the pay and employment terms corresponded to his working capacity – i.e. a part-time position with reduced pay. 

The employee’s trade union believed that the dismissal was in contravention of the Anti-Discrimination Act, the Act on Part-Time Work and the Salaried Employees Act and therefore issued proceedings, which ended up in the Supreme Court.

Not in breach of the Anti-Discrimination Act
Firstly, the Supreme Court established in its judgment that the reduced-hours working scheme consists of two elements – the employment relationship and a public subsidy – and must be regarded as a job-creating effort allowed under the provision in the Anti-Discrimination Act specifying that according to statute or other public efforts measures can be taken with a view to improving the employment possibilities for people of a certain age or with a certain disability. The termination of such a positive special measure as a consequence of the employee in question reaching the statutory retirement age cannot, in the opinion of the Supreme Court, be considered as unlawful discrimination – neither on grounds of age nor disability.

Secondly, the Supreme Court stated that it had to be regarded as a clear condition for the employment that the employer received a subsidy relating to the reduced-hours job from the local authorities. The basis of the employment thus lapsed when the wage subsidy ended.

Against this background, the Supreme Court found that the dismissal of the employee with a reduced-hours job was not in conflict of the Anti-Discrimination Act.

Since the basis of the employment had lapsed as a consequence of the cessation of the reduced-hours working scheme, the dismissal was not in conflict with the Act on Part-Time Work and/or the Salaried Employees Act.

The Supreme Court upheld the judgment by the Maritime and Commercial Court.

Norrbom Vinding notes

  • that the Supreme Court establishes that the reduced-hours working scheme consists of two elements – the employment relationship and a public subsidy – and that the cessation of such a positive special measure as a result of the employee reaching the mandatory retirement age does not constitute unlawful discrimination on grounds of age or disability;
  • that in the specific case, the Supreme Court rules that the dismissal of the employee who had reached the mandatory retirement age at which time the public wage subsidy relating to the reduced-hours job lapsed was thus not in breach of the Anti-Discrimination Act regardless of the fact that this condition was not expressly stated in the contractual basis; and
  • that the dismissal of the employee on those grounds was neither in conflict with the Act on Part-Time Work nor section 2b of the Salaried Employees Act.

The content of the above is not, and should not be a substitute for legal advice.

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