Palacios de la Villa, Case C-411/05

European Court of Justice
16 October 2007


Mr. de la Villa was dismissed by his employer when he reached 65 years of age on the ground that he had reached the compulsory retirement age, and national law allowed clauses on compulsory retirement age in collective agreements. This ground of dismissal was provided by a collective agreement which was in conformity with the national law. Mr. de la Villa requested the national courts to declare the dismissal void.

Question referred to the CJEU by the national court

Is a national law which allows collective agreements according to which workers can be dismissed if they have reached normal retirement age and are entitled to a retirement pension compatible with the EU law?

Court’s ruling

The Court at the outset emphasized that the EU law combats certain types of discrimination, including discrimination on grounds of age, as regards employment and occupation. Direct discrimination is to be taken to occur where one person is treated less favourably than another person in a comparable situation also on the ground of age. However, an unequal treatment can be allowed if it is justified by a legitimate aim and if the means of achieving that aim are appropriate and necessary. In the particular case the Court pointed that as the national law treated persons below retirement age differently than those above, it established a difference in treatment directly based on age. It was clear to the Court that the different treatment had a reasonable legitimate aim – regulating labor market and promoting employment. It also found the treatment appropriate and necessary as

  • the states enjoy wide discretion in the field of employment and social policy
  • the relevant legislation is not based only on a specific age, but also takes account of the fact that the persons concerned are entitled to financial compensation by way of a retirement pension
  • the compulsory retirement clause is not automatic, but can be opted for in collective agreements after discussions with involved parties

Because of those reasons the Court found the national law compatible with the principle of equality.

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Last updated 08/11/2023