A company’s early retirement scheme does not constitute discrimination under the Equal Treatment Act

The Federal Labour Court (BAG) ruled in March (docket no.: 8 AZR 677/14) that a company’s early retirement pension scheme does not violate the German Equal Treatment Act if the employee is free in his decision to accept the offer.

In this case the employer offered within early retirement scheme which provided that the employee (a manager) could retire at the age of 60 receiving a pension. The plaintiff, who was born in 1952, agreed to the scheme in 2005 and left the company accordingly in October 2012. However, in November 2012 the employer introduced a new early retirement scheme allowing retirement at the age of 62. The employer claimed that the limitation of his employment contract to the age of 60 as well as not being offered the new early retirement scheme constituted discrimination because of age.

The claim was dismissed in all instances. The Federal Labour Court held as managers are not treated less favourably than comparable employees the early retirement scheme does not constitute discrimination under the German Equal Treatment Act. As early retirement only applied to employees in managing positions the employee was in fact treated differently but not discriminated against. The early retirement scheme constituted an offer by the employer which the employee was free to accept. Therefore the early retirement scheme expanded the employee’s options and did not lead to discriminatory treatment. Furthermore, as the employee’s employment contract had already terminated by November 2012 the employer did not have to offer him a contract under the new early pension scheme.