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Cite as: [2008] EUECJ C-388/7_O, [2008] EUECJ C-388/07_O

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OPINION OF ADVOCATE GENERAL

MAZÁK

delivered on 23 September 2008 (1)

Case C-388/07

The Incorporated Trustees of the National Council on Ageing (Age Concern England)

Secretary of State for Business, Enterprise and Regulatory Reform

(Reference for a preliminary ruling from the High Court of Justice of England and Wales, Queen's Bench Division (Administrative Court) (United Kingdom))

(Council Directive 2000/78/EC Article 6(1) Age discrimination Compulsory retirement National legislation permitting employers to dismiss employees aged 65 and over if the reason of dismissal is retirement Justification)

I Introduction

By order of 24 July 2007, (2) the High Court of Justice of England and Wales, Queen's Bench Division (Administrative Court), (United Kingdom) has referred several questions to the Court of Justice for a preliminary ruling on the interpretation of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation. (3) By its questions, the High Court essentially seeks to ascertain whether that directive precludes national legislation intended to transpose the age discrimination provisions of the directive which allows employers, subject to certain conditions, forcibly to retire workers aged 65 and over.

That issue has been raised in the context of an action brought by the Incorporated Trustees of the National Council on Ageing (Age Concern England) (hereinafter 'Age Concern England') against the Secretary of State for Business, Enterprise and Regulatory Reform, in which Age Concern England challenges the legality of that legislation.

The present case, which, following the Mangold, (4)Lindorfer, (5)Palacios de la Villa (6) and Bartsch (7) judgments, will add to the emerging body of case-law on age discrimination, invites the Court to shed further light on the obligations of the Member States in respect of the prohibition of discrimination on grounds of age laid down in Article 2 of Directive 2000/78, in particular the degree of specificity with which that prohibition must be transposed into national law.

II Legal Framework

A Community law

Directive 2000/78 was adopted on the basis of Article 13 EC. The first, 14th and 25th recitals in the preamble to the directive are worded as follows:

'(1) In accordance with Article 6 of the Treaty on European Union, the European Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to all Member States and it respects fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, as general principles of Community law.

...

(14) This Directive shall be without prejudice to national provisions laying down retirement ages.

...

(25) The prohibition of age discrimination is an essential part of meeting the aims set out in the Employment Guidelines and encouraging diversity in the workforce. However, differences in treatment in connection with age may be justified under certain circumstances and therefore require specific provisions which may vary in accordance with the situation in Member States. It is therefore essential to distinguish between differences in treatment which are justified, in particular by legitimate employment policy, labour market and vocational training objectives, and discrimination which must be prohibited.

...'

Article 1 of Directive 2000/78 states that the purpose of that directive is:

'... to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.'

Article 2, which defines the concept of discrimination, provides as follows:

'1. For the purposes of this Directive, the 'principle of equal treatment' shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1.

2. For the purposes of paragraph 1:

(a) direct discrimination shall be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds referred to in Article 1;

(b) indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would put persons having a particular religion or belief, a particular disability, a particular age, or a particular sexual orientation at a particular disadvantage compared with other persons unless:

(i) that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary, or

(ii) as regards persons with a particular disability, the employer or any person or organisation to whom this Directive applies, is obliged, under national legislation, to take appropriate measures in line with the principles contained in Article 5 in order to eliminate disadvantages entailed by such provision, criterion or practice.

...'

Article 6 provides for justification of differences of treatment on grounds of age:

'1. Notwithstanding Article 2(2), 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.

Such differences of treatment may include, among others:

(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;

(b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;

(c) the fixing of a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement.

2. Notwithstanding Article 2(2), Member States may provide that the fixing for occupational social security schemes of ages for admission or entitlement to retirement or invalidity benefits, including the fixing under those schemes of different ages for employees or groups or categories of employees, and the use, in the context of such schemes, of age criteria in actuarial calculations, does not constitute discrimination on the grounds of age, provided this does not result in discrimination on the grounds of sex.'

B Relevant national law

The order for reference states that prior to 1 October 2006 there were no legislative provisions within the United Kingdom which prevented discrimination on grounds of age in relation to recruitment and employment. Employers were able to dismiss employees who had reached the employer's normal retiring age, or, in the absence of such a normal retiring age, the age of 65. Sections 109 and 156 of the Employment Rights Act 1996 ('the 1996 Act') provided that the employees could not claim any redundancy payment in such circumstances.

On 3 April 2006, the United Kingdom transposed Directive 2000/78 by introducing the Employment Equality (Age) Regulations 2006, SI 1031/2006 ('the Regulations').

Regulation 3 of the Regulations defines the concepts of direct and indirect age discrimination for the purposes of national law. It is worded as follows:

'(1) For the purposes of these Regulations, a person ('Č) discriminates against another person ('B') if

(a) on grounds of B's age, A treats B less favourably than he treats or would treat other persons, or

(b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but

(i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons, and

(ii) which puts B at that disadvantage,

and A cannot show the treatment or, as the case may be, provision, criterion or practice to be a proportionate means of achieving a legitimate aim.'

By way of exception, Regulation 30 of the Regulations provides:

'(1) This regulation applies in relation to an employee within the meaning of section 230(1) of the 1996 Act, a person in Crown employment, a relevant member of the House of Commons staff, and a relevant member of the House of Lords staff.

(2) Nothing in Parts 2 or 3 shall render unlawful the dismissal of a person to whom this regulation applies at or over the age of 65 where the reason for the dismissal is retirement.

(3) For the purposes of this regulation, whether or not the reason for a dismissal is retirement shall be determined in accordance with sections 98ZA to 98ZF of the 1996 Act.'

According to the referring court, the effect of Regulation 30 is that an employee at or over the age of 65 is not entitled under national law to claim that his or her dismissal was an act of unlawful age discrimination where 'the reason for the dismissal is retirement'.

Whether or not that is the case depends on the application of the criteria in Schedule 8 to the Regulations. Those criteria vary according to whether the employee is 65 or over, whether the employer has a normal retirement age, and whether the employer has followed the procedure in Schedule 6 to the Regulations.

Thus, pursuant to Schedule 6, an employer who intends to claim that 'the reason for the dismissal is retirement' in order to rely on Regulation 30 must give the employee between six months' and one year's notice of the intended date of dismissal and of the employee's right to make a request not to be dismissed for retirement. The employee then has a right formally to request not to be dismissed for retirement, which request must be considered by the employer in accordance with procedures laid down in Schedule 6. An employer is not, however, obliged to grant such a request.

Regulation 7(4) of the Regulations supplements Regulation 30 by permitting employers to discriminate against people at or over the age of 65 on grounds of age in relation to recruitment where Regulation 30 could apply to the person if they were recruited. Regulation 7 provides:

'1. It is unlawful for an employer, in relation to employment by him at an establishment in Great Britain, to discriminate against a person

(a) in the arrangements he makes for the purpose of determining to whom he should offer employment;

(b) ...

...

4. Subject to paragraph (5), paragraph (l)(a) and (c) does not apply in relation to a person

(a) whose age is greater than the employer's normal retirement age or, if the employer does not have a normal retirement age, the age of 65; or

(b) who would, within a period of six months from the date of his application to the employer, reach the employer's normal retirement age or, if the employer does not have a normal retirement age, the age of 65.

5. Paragraph (4) only applies to a person to whom, if he was recruited by the employer, regulation 30 (exception for retirement) could apply.

...

8. In paragraph (4) 'normal retirement age' is an age of 65 or more which meets the requirements of section 98ZH of the 1996 Act.'

III Factual background, procedure and questions referred

The claimant in the main proceedings, the Incorporated Trustees of the National Council on Ageing (Age Concern England), is a charity which aims to promote the welfare of older people. By its action, Age Concern England seeks declarations that parts of Regulations 3, 30 and 7 are invalid on the grounds that they do not properly transpose Directive 2000/78.

It contends, in particular, that Regulations 30 and 7(4) and (5) fall within the scope of Directive 2000/78 and the prohibition of unlawful discrimination on grounds of age as laid down therein and that Article 6(1) of that directive does not permit Member States to introduce a general defence of justification for direct age discrimination, as provided for by Regulation 3 of the Regulations. It permits them only to make specific provisions listing those acts of less favourable treatment on grounds of age which may be justified by the discriminator if they are proportionate to the achievement of a legitimate aim. Age Concern England submits, furthermore, that the test for objective justification under Article 6 of Directive 2000/78 is materially different from that under Article 2(2)(b) of that directive and that the standard for objective justification was not met in the circumstances of this case.

The United Kingdom authorities dispute those views and submit that the contested provisions of the Regulations are not covered by Directive 2000/78 and, in any event, that they comply with Article 6 of that directive.

Against that background, the High Court stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

'In relation to ... Directive 2000/78 ...:

1. National retirement ages and the scope of the directive

(i) Does the scope of the directive extend to national rules which permit employers to dismiss employees aged 65 or over by reason of retirement?

(ii) Does the scope of the directive extend to national rules which permit employers to dismiss employees aged 65 or over by reason of retirement where they were introduced after the directive was made?

(iii) In the light of the answers to (i) and (ii) above

(1) were section 109 and/or 156 of the 1996 Act, and/or

(2) are Regulations 30 and 7, when read with Schedules 8 and 6 to the Regulations,

national provisions laying down retirement ages within the meaning of Recital 14?

2. The definition of direct age discrimination: justification defence

(iv) Does Article 6(1) of the directive permit Member States to introduce legislation providing that a difference of treatment on grounds of age does not constitute discrimination if it is determined to be a proportionate means of achieving a legitimate aim, or does Article 6(1) require Member States to define the kinds of differences of treatment which may be so justified, by a list or other measure which is similar in form and content to Article 6(1)?

3. The test for the justification of direct and indirect discrimination

(v) Is there any, and if so what, significant practical difference between the test for justification set out in Article 2(2) of the directive in relation to indirect discrimination, and the test for justification set out in relation to direct age discrimination at Article 6(1) of the directive?'

IV Legal analysis

A Preliminary remarks

While the judgment in the main proceedings may, as Age Concern England has emphasised in its pleadings, be highly important as regards the retirement system set up in the United Kingdom and have a decisive impact on a large number of cases concerning compulsory retirement that are pending before national courts in the United Kingdom, the scope of the present reference for a preliminary ruling is actually relatively limited.

In particular, the High Court of Justice in its order for reference has deliberately refrained from asking the Court to rule on the compatibility with Directive 2000/78 of the kind of national legislation at issue in the main proceedings, which permits employers to dismiss employees aged 65 or over by reason of retirement. Accordingly, the referring court has not provided this Court with any substantial information such as to allow it to assess whether such rules may be justified under Article 6(1) of the directive; nor have the possible objectives pursued by the national rules at issue or the proportionality of those measures been discussed in detail by the parties to the present proceedings.

Rather, as the United Kingdom Government and the Commission have correctly observed, the High Court has referred quite specific questions to the Court which are intended to enable the referring court to dispose of certain issues raised by Age Concern England in particular and to conduct its own assessment of whether the Regulations are in conformity with Directive 2000/78.

To that end, the referring court essentially asks by Questions (i), (ii) and (iii), which I consider it appropriate to examine together, whether such legislation falls within the scope of that directive. That question can be disposed of swiftly in the light of the judgment of the Court in Palacios de la Villa. (8)

The remaining two questions are closely related in that they are both concerned with the interpretation of Article 6 of the directive and the compatibility of legislation such as that at issue in the present case with that article. More particularly, the referring court first wishes to know whether Article 6(1) of Directive 2000/78 requires Member States to specify the kinds of differences of treatment which may be justified under Article 6. Secondly, it asks about the test for the justification of direct age discrimination.

It should, however, be recalled that the Court of Justice, which is called on to provide answers of use to the national court, may provide guidance to it in order to enable it to give judgment, in so far as the documents in the file and the written and oral observations which have been submitted to the Court allow it to do so. (9)

B National retirement ages and the scope of the directive (Questions (i), (ii) and (iii))

By Questions (i), (ii) and (iii), the referring court essentially seeks to ascertain whether national rules on retirement ages such as the Regulations, which permit dismissal by reason of retirement of a person aged 65 and over, fall within the scope of Directive 2000/78.

1. Main submissions of the parties

In the present proceedings, written observations have been submitted by Age Concern England, the United Kingdom and Italian Governments, as well as by the Commission. With the exception of the Italian Government, those parties were also represented at the hearing held on 2 July 2008.

All parties essentially agree that it is clear from Palacios de la Villa (10) that national rules on retirement ages such as the Regulations fall within the scope of Directive 2000/78. The Italian Government adds, however, that in so far as Question (iii) is to be understood as concerning the interpretation of a provision of national law, it must be declared inadmissible.

2. Appraisal

Directive 2000/78 is designed to lay down a general framework in order to guarantee equal treatment 'in employment and occupation' to all persons, by offering them effective protection against discrimination on one of the grounds covered by Article 1, which includes age. (11)

The material scope of Directive 2000/78 is defined in detail in Article 3. In particular, pursuant to Article 3(1)(c) of the directive, it applies, within the framework of the competence conferred on the Community, 'to all persons ... in relation to employment and working conditions, including dismissals and pay'.

In that regard, it should be noted that according to the 14th recital in the preamble to Directive 2000/78, account of which must be taken in interpreting the directive, the directive is to be without prejudice to national provisions laying down retirement ages.

However, in Palacios de la Villa, the Court interpreted that recital narrowly, holding that it 'merely states that the directive does not affect the competence of the Member State to determine retirement age' and that it does not 'in any way preclude the application of that directive to national measures governing the conditions for termination of employment contracts where the retirement age, thus established, has been reached'. (12)

On the basis of those premisses, the Court found in Palacios de la Villa that the legislation at issue in that case, which permitted the automatic termination of an employment relationship concluded between an employer and a worker once the latter reached the age of 65, affected the duration of the employment relationship between the parties and, more generally, the engagement of the worker concerned in an occupation, by preventing his future participation in the labour force, and that such legislation had therefore to be regarded as establishing rules relating to 'employment and working conditions, including dismissals and pay' within the meaning of Article 3(1)(c) of Directive 2000/78. (13)

The same reasoning clearly applies to legislation such as that at issue in the present case, which allows employers to dismiss employees aged 65 and over if the reason of dismissal is retirement.

Consequently, Questions (i) to (iii) should be answered to the effect that Directive 2000/78 is applicable to national rules, such as those at issue in the main proceedings, which permit employers to dismiss employees aged 65 and over by reason of retirement.

C The requirement of specific justification (Question (iv))

By Question (iv), in which the referring court clearly has in mind the definition of age discrimination for the purposes of national law contained in Regulation 3 of the Regulations, that court essentially wishes to know whether Article 6(1) of Directive 2000/78 permits a general justification of differences of treatment on grounds of age, such as that provided for by Regulation 3, or whether it requires Member States to specify the kinds of differences of treatment which may be justified by means of a list or other measure which is similar in form and content to the list in Article 6(1).

1. Main submissions of the parties

According to Age Concern England, there are three problems with Regulation 3. It makes no distinction between justification under Article 6 and that under Article 2(2)(b) of Directive 2000/78; it does not explain what differences of treatment based on age are potentially capable of being justified; finally, it does not set out what aims are capable of justifying such differences of treatment.

As regards specifically Question (iv), Age Concern England submits that the prohibition on age discrimination set out in Directive 2000/78 is a particular aspect of the fundamental right to equal treatment and that all exceptions to that principle must be clearly justified. It is, moreover, only in the most exceptional cases that direct discrimination which might otherwise be a breach of the principle of equal treatment can be justified.

It argues that Article 6(1) of Directive 2000/78 must be construed strictly so as to limit the circumstances in which justification is permitted. In its view, by having recourse, in points (a) to (c) of the second subparagraph of Article 6(1) of the directive, to an illustrative list of objective and reasonable justifications, the Community legislature intended to impose on Member States the obligation to set out, in their implementing instruments, a specific list of the differences in treatment which may be justified by reference to a legitimate aim. That view is corroborated by the 25th recital in the preamble to Directive 2000/78. Conversely, the directive does not permit a Member State to introduce legislation providing that any (unspecified) difference of treatment on grounds of age will not constitute discrimination if it is found to be a proportionate means of achieving a legitimate aim.

By way of a general remark, the United Kingdom notes that Age Concern England tries inappropriately to extend the ambit of the present reference, which is, however, confined by the specific questions referred to the Court of Justice by the High Court. It emphasises that the detailed system of retirement in the United Kingdom and the question whether that system is proportionate and justified, which involves numerous and complex considerations, is not at issue as such in the present proceedings. It also disputes that access to courts is precluded, as Age Concern England seems to suggest. That allegation is based on a confusion between, on the one hand, the duty under Article 9 of Directive 2000/78 to ensure that judicial procedures are available for the enforcement of obligations under the directive and, on the other hand, the right of Member States under Article 6(1) of the directive not to regard certain distinctions based on age as unlawful discrimination.

As to Question (iv), the United Kingdom Government disputes the interpretation proposed by Age Concern England and submits that Article 6(1) of Directive 2000/78 does not require Member States to define, by means of a list or other measure which is similar in form or content to the list in Article 6(1), the kinds of difference of treatment which may be justified as constituting a proportionate means of achieving a legitimate aim within the meaning of that provision. In support of its view, it refers to the wording of Article 6(1) of and the 25th recital in the preamble to the directive, the judgment of the Court in Palacios de la Villa, (14) the legislative history of the directive and the margin of appreciation Member States enjoy in the implementation of directives pursuant to Article 249 EC. When drafting Article 6(1) of the directive, the Community legislator was well aware that it would be unrealistic to identify in advance the kinds of situations in which differences in treatment based on age could be justified. It would be even more inappropriate to require the Member States to draw up such a list.

The Italian Government also considers that the leeway accorded to Member States in transposing directives makes it unnecessary to define, by means of a specific list, the kinds of differences in treatment which may be justified.

The Commission submits that any infringement of the principle of non-discrimination on grounds of age, which is a fundamental principle of Community law, must be justified by a public interest/social policy level objective. It understands Article 6(1), interpreted in the light of the 25th recital in the preamble to Directive 2000/78, to be providing for a limited form of exception to that fundamental principle which is justified by reference to particular social policy considerations prevailing in a given Member State. Article 6(1) thus implies that it is necessary to introduce a specific national measure which reflects a particular set of circumstances and objectives. Regulation 30, which states that the dismissal of a person at or over the age of 65 is lawful 'where the reason for the dismissal is retirement', provides an example of such a measure. The employer thus applies a national policy to specific circumstances, but the choice of that policy lies with the Member State and not the employer.

2. Appraisal

Since this question is concerned with an issue of 'legislative technique' in the transposition of Article 6(1) of Directive 2000/78 rather than with its material scope, it seems appropriate to begin by recalling some basic principles concerning the extent of the Member States' obligation to transpose a directive.

On the one hand, the very wording of Article 249 EC indicates that, since directives are binding as to the result to be achieved, Member States are in principle free to choose the ways and means of implementing a directive. According to the case-law of the Court, the degree of flexibility thus left to Member States in the implementation of directives also implies that transposition into national law does not necessarily require legislative action in each Member State. The Court has repeatedly held that it is not always necessary formally to enact the requirements of a directive in a specific express legal provision, since the general legal context may be sufficient for implementation of a directive, depending on its content. (15)

On the other hand, it is clear that, while the Member States retain a broad discretion as to the choice of methods, they are in any event obliged to take all the measures necessary to ensure that the directive is fully effective, in accordance with the objective it pursues. (16)

The need to ensure that Community law is fully applied requires Member States, in the first place, to bring their legislation into conformity with Community law and, of course, not to adopt new legislation which may compromise the full effectiveness of a given directive. Beyond that, however, it may be necessary, especially where the relevant provisions of a directive seek to create rights for individuals, to adopt rules of law in order to create a situation which is sufficiently precise, clear and transparent to allow individuals to know the full extent of their rights and to rely on them before the national courts. (17)

In that context, the purpose of Directive 2000/78, according to Article 1 in conjunction with Article 3(1)(c), is to offer to all persons, as regards both the public and private sectors including public bodies, in relation to employment and working conditions, effective protection against discrimination on the grounds listed in Article 1, which includes age. (18)

The directive thus seeks to give effective protection to individuals, particularly in (horizontal) relationships with other individuals in contexts such as employment, from discrimination based inter alia on age. It is clear from Articles 9 and 10 of the directive and the 29th and 31st recitals in the preamble to the directive that Member States are required to make available adequate means of legal protection to that effect and to provide for a shift in the burden of proof, once there is a prima facie case of discrimination, from the person claiming to be the victim to the respondent.

In view of the substantive protection, that Directive 2000/78 is consequently intended to offer to individuals, against forms of discrimination prohibited under the directive, full implementation of the directive would arguably not be achieved by merely ensuring that national legislation falling within the scope of the directive actually conformed with the requirements of equal treatment in employment and occupation flowing from the directive.

Rather, in order to enable individuals to avail themselves effectively, within the sphere of application of Directive 2000/78, of their right to be treated equally and, more particularly, not to suffer prohibited discrimination on grounds of age, Member States are in my view additionally required, in respect of occupation and employment, to adopt rules within their domestic law providing specifically and with sufficient clarity for the prohibition of discrimination on grounds of age, as set out in particular in Article 1 in conjunction with Articles 2 and 6(1) of Directive 2000/78. It seems to me that Regulation 3 of the Regulations in principle constitutes such legislation, in that it lays down a definition of age discrimination for the purposes of national law.

However, contrary to what Age Concern England appears to suggest, I do not think that the transposition of Directive 2000/78, and in particular Article 6(1) thereof, into national law lacks the necessary precision or is insufficiently specific solely on the grounds that the domestic legislation concerned does not specifically set out the kinds of differences of treatment which may be justified under Article 6(1).

As the United Kingdom Government has pointed out, the second subparagraph of Article 6(1) of the directive merely sets out several examples of differences of treatment in order to illustrate the kinds of differences of treatment that are addressed in the first subparagraph of Article 6(1), that is, those which may be considered to be objectively and reasonably justified by a legitimate aim and hence compatible with the requirements of the directive. (19)

It cannot be inferred from that that Member States are required to set out in their implementing instruments a specific list of the differences in treatment which may be justified by reference to a legitimate aim. In view of the variety of situations in which such differences of treatment could arise, it would also arguably be impossible to establish such a list in advance without unduly restricting the scope of the justification provided for in the first subparagraph of Article 6(1) of the directive.

Finally, it should also be borne in mind that Regulation 3 does not determine the scope of the prohibition under national law of age discrimination in employment and occupation in isolation from other, more specific, rules governing particular situations and aspects, such as Regulation 30 in respect of compulsory retirement.

I conclude that national legislation such as Regulation 3 is not incompatible with Article 6(1) of Directive 2000/78 merely because it does not contain a specific list of permissible forms of treatment.

I therefore propose that Question (iv) should be answered to the effect that Article 6(1) of Directive 2000/78 permits Member States to introduce legislation providing that a difference of treatment on grounds of age does not constitute discrimination if it is determined to be a proportionate means of meeting a legitimate aim within the meaning of Article 6(1). It does not, however, require Member States to define the kinds of differences of treatment which may be justified under Article 6(1) by means of a list or other measure which is similar in form and content to the list in Article 6(1).

D The test for the justification of direct and indirect discrimination

By Question (v), the referring court seeks guidance as to how to ascertain whether Regulations 7(4), 7(5) and 30 of the Regulations, in so far as they permit employers to dismiss employees aged 65 or over if the reason for dismissal is retirement, are justified under Article 6(1) of Directive 2000/78. To that end, it wishes to know whether there is any practical difference between the tests for justification set out respectively in Article 2(2) and Article 6(1) of the directive.

1. Main submissions of the parties

Age Concern England stresses the exceptional nature of Article 6 of Directive 2000/78 and the restrictive interpretation which must be given to it for that reason. It finds support for that view in the objective and the wording of Article 6 of and the 25th recital in the preamble to Directive 2000/78 and in the travaux préparatoires.

It notes that Article 6(1) limits derogations from the principle of non-discrimination to measures which are justified as being both 'objective' and 'reasonable'. It observes that the use of that twofold condition is unique in secondary Community law and is directly linked to the case-law of the European Court of Human Rights in the area of discrimination on grounds of sex or race. Since, according to Mangold, (20) the principle of non-discrimination on grounds of age is a general principle of Community law, any justification for direct discrimination on grounds of age must be subjected to a very high degree of scrutiny.

Age Concern England thus takes the view that the test for justification set out in Article 2(2) of the directive in relation to indirect discrimination is clearly different from that laid down by Article 6(1) of the directive in respect of direct discrimination.

Age Concern England concludes that Article 6(1) of Directive 2000/78 must be interpreted as meaning that a respondent can justify less favourable treatment on the grounds of age only by showing that the difference in treatment is both objectively and reasonably justified. The use of those terms indicates that such justification is to be permitted only where there are weighty reasons and in very exceptional and limited circumstances of the kind set out in Article 6 of Directive 2000/78 or in specified analogous circumstances.

By contrast, the United Kingdom Government takes the view, on the basis of the meaning and purpose of Directive 2000/78, its legislative history and Palacios de la Villa, (21) that there is no practical difference between the test for justification set out in Article 2(2) of the directive and the test for justification set out in relation to direct age discrimination in Article 6(1) of the directive. It argues that Age Concern England attaches too much importance to the use of the word 'reasonably' in conjunction with the word 'objectively'. It points out that Article 6(1) of the directive also refers to situations constituting indirect discrimination, for example the minimum conditions of seniority or professional experience required for access to employment (point (b) of the second subparagraph of Article 6(1) of the directive). Objective and proportionate justification may generally be relied on to rebut a complaint of discrimination, both in Community law and under the European Convention on Human Rights.

The Italian Government takes the view that Articles 2(2) and 6(1) of Directive 2000/78 are different in scope, in the sense that the derogations from the principle of non-discrimination on grounds of age permitted under Article 6(1) are broader than those governed by Article 2 of the directive.

The Commission agrees with the United Kingdom Government that the difference of wording between Article 2(2) and Article 6(1) of Directive 2000/78 is not significant. Instead, it sees the key distinction between the two articles as relating to the question of who has to provide the justification, its nature, and how it has to be evidenced. The Commission explained at the hearing that it sees Article 6(1) as a form of lex specialis in relation to Article 2(2) of the directive, providing the only possible justification of direct age discrimination.

As Article 6(1) explicitly states, it is for the Member State to justify its policy choices 'within the context of national law'. It is also clear from Palacios de la Villa (22) that the aim behind a specific legislative measure must be capable of being identified either directly from its wording or from its general context, including for example official documents. By contrast, Article 2(2) of the directive focuses on whether an individual employer can justify his employment practices.

Referring to explanatory notes issued by the Department of Trade and Industry, the Commission notes that the social-policy objective pursued by the Regulations is that of 'workforce planning' and the avoidance of an adverse impact on pensions and other work-related benefits, objectives which belong to the category of legitimate aims envisaged by Article 6(1) of the directive. The Commission also refers to a number of considerations and criteria which the referring court may take into account when assessing the proportionality of the rules at issue (i.e. whether they are appropriate and necessary).

2. Appraisal

In a perfect world everyone would be judged individually and according to his merits, everyone would be treated in the same way in so far as he is the same and differently in so far as he is different. In a perfect world, everyone would thus be given his due and justice would be done.

Unfortunately, perfect justice in that sense must remain beyond the reach of the law of this world. As a 'rule', law must by its nature be general; it can as such approach reality only through the abstract, and it is then for the courts, administrations and individuals to apply it to individual cases and thus to 'translate' the general law, in the ideal case, into individual justice.

Thus, law generalises and categorises; it addresses individuals and individual situations through the prism of types, categories, characteristics and classes; it differentiates in accordance with certain criteria. (23) However, over time, some classifications have been recognised by the legal order as being unacceptable and contrary to the values underlying it. In line with Article 13 EC, Article 1 of Directive 2000/78 identifies religion or belief, disability, age or sexual orientation as criteria on which differentiations in law may in principle not be based, that is, unless it is established that such differentiation is objectively justified.

Classifications or differences in treatment based, directly or indirectly, on those grounds are accordingly in principle 'suspect', and may constitute unlawful discrimination, although it follows from the possibilities of justification provided for by Article 2 of the directive that that need not be so. It all depends particularly as regards differences in treatment on the grounds of age.

Specifically with regard to age, the Community legislator emphasised in the 25th recital in the preamble to Directive 2000/78 that it is 'essential to distinguish between differences in treatment which are justified, in particular by legitimate employment policy, labour market and vocational training objectives, and discrimination which must be prohibited'.

Age is also singled out among the grounds mentioned in Article 1 of the directive in that Article 6(1) contains a specific justification for differences of treatment on grounds of age providing such inequalities do not constitute discrimination prohibited under Article 2 '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 proportionate and necessary'.

It has been pointed out before that that particularly nuanced approach to differences in treatment based on age is reflective of a genuine difference between age and the other grounds mentioned in Article 2 of the directive. (24) Age is not by its nature a 'suspect ground', at least not so much as for example race or sex. Simple in principle to administrate, clear and transparent, age-based differentiations, age-limits and age-related measures are, quite to the contrary, widespread in law and in social and employment legislation in particular. At the same time, age is fluid as a criterion. Whether differential treatment constitutes age discrimination may not only be a question of whether it is founded directly or indirectly on age, but also a question of what age it relates to. It may therefore be much more difficult than for example in the case of differentiation on grounds of sex to establish where justifiable differentiations on the basis of age are ending and unjustifiable discrimination is starting. Finally, inasmuch as age limits such as the retirement ages provided for by the Regulations entail a distinction based directly on age, they fall automatically to be considered under the head of direct discrimination as defined in Article 2 of Directive 2000/78.

By providing for a specific and additional possibility of justification, Article 6(1) aims to take account of the specific nature and difficulties of age discrimination. It is obviously intended to enable Member States to retain age-based employment practices and to set or preserve age limits in so far as they are justified by a legitimate employment or social policy aim. To that end, Article 6(1) of Directive 2000/78 also provides for a justification of differences of treatment directly based on age, which is unique among the forms of discrimination prohibited under the directive. (25)

Accordingly, and contrary to what Age Concern England appears to suggest, the possibilities under the directive of justifying differences of treatment based on age are more extensive than those based on the other grounds mentioned in Article 1 of the directive. That should, however, not be interpreted as putting age discrimination at the bottom of a perceived 'hierarchy' of discrimination grounds under the directive. Rather, it constitutes an expression of the material differences between those grounds and in the way they function as legal criteria. It is not a matter of value or importance, but a matter of how to entrench the scope of the prohibition of discrimination adequately.

As regards, more particularly, national legislation such as that at issue, which permits employers to dismiss employees aged 65 and over if the reason for dismissal is retirement, such a rule must be regarded as introducing a difference of treatment based directly on age, potentially amounting to direct discrimination as described in Article 2(1) and (2)(a) of Directive 2000/78.

Its possible justification therefore falls to be assessed only under Article 6(1) of Directive 2000/78. In that respect, Palacios de la Villa, which also concerned a rule providing for compulsory retirement (albeit different in certain respects), offers guidance on several aspects which are relevant to the present case.

As to the justification test to be applied under Article 6(1) of Directive 2000/78, I agree with the Commission and the United Kingdom Government that, as regards the level of scrutiny to be applied to national measures falling under Article 6(1), no importance should be attached to the use of the word 'reasonably' in addition to 'objectively'. It is apparent from case-law that the Court does not apply, when assessing the justification of national measures under Article 6(1) of the directive, a specific test of 'reasonableness' as such. Rather, the Court appears to apply the joint expression 'objectively and reasonably' to denote the legitimacy of the aim pursued by the national measure in question. (26) Moreover, Age Concern England was not able to specify a meaning of 'reasonably' which is distinct from 'objectively' so far as the level of scrutiny required is concerned.

Furthermore, the Court held in Palacios de la Villa that it is not necessary for the national measure at issue, in order to be justifiable under Article 6(1) of the directive, to refer expressly to a legitimate aim of the kind envisaged in Article 6(1); it suffices that 'other elements, taken from the general context of the measure concerned, enable the underlying aim of that law to be identified for the purposes of judicial review of its legitimacy and whether the means put in place to achieve that aim are appropriate and necessary'. (27)

Indeed, bearing in mind the old legislative maxim 'lex imperat, non docet', the possibility of justification of a provision should not depend on its objectives being set out expressly.

But I think that what such a possibility also presumes is that there is in any event some kind of legislation, and I also agree with the Commission that this is arguably also implied by the 25th recital ('specific provisions') and the wording of Article 6(1) of the directive itself. The latter primarily targets national measures, which reflect social and employment policy choices and not individual decisions of employers. (28) The justification of measures providing for differences of treatment on grounds of age therefore falls to be assessed at Member State level, 'within the context of national law'.

However, that does not in my view exclude the possibility of justifying national rules which confer some discretionary powers or a degree of flexibility on authorities or even individuals. It just means that the question to be asked in a case such as the present one, in respect of a rule such as Regulation 30 and with regard to Article 6(1) of Directive 2000/78, is not whether the individual decision of an employer forcibly to retire an employee is justified, but whether a rule whereby an employer is permitted to do so on grounds of retirement if the employee is aged 65 or over is justified by reference to a legitimate aim, as Article 6(1) envisages. (29)

Next, if such a legitimate aim can be identified, Article 6(1) of Directive 2000/78 requires that the means employed to achieve that aim are 'appropriate and necessary'.

In that connection, the Court made reference in Palacios de la Villa to settled case-law according to which 'the Member States and, where appropriate, the social partners at national level enjoy broad discretion in their choice, not only to pursue a particular aim in the field of social and employment policy, but also in the definition of measures capable of achieving it'. (30)

Furthermore, the Court mentioned the various and complex considerations the national authorities concerned may take into account as regards retirement rules and concluded that it is for the competent authorities of the Member States to find the right balance between the different interests involved, provided the requirements of proportionality are respected. (31)

That appears to suggest that Member States are left a relatively wide discretion in identifying the means to be used to achieve the legitimate aim relating to the social and employment policies pursued, which is possibly also reflected by the wording of the answer given by the Court in that case, according to which such rules are not precluded if 'it is not apparent that the means put in place to achieve that aim of public interest are inappropriate and unnecessary for the purpose'. (32)

In the light of the foregoing considerations I therefore propose to answer Question (v) to the effect that a rule such as that at issue in the main proceedings, which permits employers to dismiss employees aged 65 or over if the reason for dismissal is retirement, can in principle be justified under Article 6(1) of Directive 2000/78 if that rule is objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market and it is not apparent that the means put in place to achieve that aim of public interest are inappropriate and unnecessary for the purpose.

V Conclusion

I therefore propose that the Court should reply as follows to the questions referred:

Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation is applicable to national rules, such as the Employment Equality (Age) Regulations 2006, SI 1031/2006, which permit employers to dismiss employees aged 65 and over by reason of retirement;

Article 6(1) of Directive 2000/78 permits Member States to introduce legislation providing that a difference of treatment on grounds of age does not constitute discrimination if it is determined to be a proportionate means of meeting a legitimate aim within the meaning of Article 6(1). It does not, however, require Member States to define the kinds of differences of treatment which may be justified under Article 6(1) by means of a list or other measure which is similar in form and content to the list in Article 6(1);

A rule such as that at issue in the main proceedings, which permits employers to dismiss employees aged 65 or over if the reason for dismissal is retirement, can in principle be justified under Article 6(1) of Directive 2000/78 if that rule is objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market and it is not apparent that the means put in place to achieve that aim of public interest are inappropriate and unnecessary for the purpose.

1 Original language: English.

2 Received at the Court's Registry on 20 August 2007 (fax transmission received at the Court's Registry on 9 August 2007).

3 OJ 2000 L 303, p. 16.

4 Case C-144/04 [2005] ECR I-9981.

5 Case C-227/04 P [2007] ECR I-6767, although the Court finally decided that case purely on the basis of sex discrimination. See, however, the first Opinion of Advocate General Jacobs, delivered on 27 October 2005, and the second Opinion of Advocate General Sharpston, delivered, after the case had been reopened, on 30 November 2006.

6 Case C-411/05 [2007] ECR I-8531.

7 Case C-427/06 [2008] ECR I-0000.

8 Cited in footnote 6.

9 See for example, to that effect, Case C-167/97 Seymour-Smith and Perez [1999] ECR I-623, paragraph 68, and Case C-278/93 Freers and Speckmann [1996] ECR I-1165, paragraph 24.

10 Cited in footnote 6.

11 See Palacios de la Villa, cited in footnote 6, paragraph 42.

12 Case cited in footnote 6, paragraph 44.

13 See Palacios de la Villa, cited in footnote 6, paragraphs 45 to 47.

14 Cited in footnote 6, paragraphs 51 to 55.

15 See for example, Case C-233/00 Commission v France [2003] ECR I-6625, paragraph 76, and Case C-49/00 Commission v Italy [2001] ECR I-8575, paragraph 21.

16 See for example, to that effect, Case C-216/05 Commission v Ireland [2006] ECR I-10787, paragraph 26, and Case C-208/90 Emmott [1991] ECR I-4269, paragraph 18.

17 See for example, to that effect, Commission v France, cited in footnote 15, paragraph 76, and Case C-162/99 Commission v Italy [2001] ECR I-541, paragraph 22.

18 See points 28 and 29 above.

19 See, to that effect, Palacios de la Villa, cited in footnote 6, paragraph 52.

20 Cited in footnote 4.

21 Cited in footnote 6, paragraphs 60 to 65.

22 Cited in footnote 6, paragraph 57.

23 If law leaves too much room for individual decisions, it undermines its intrinsic functions of establishing legal certainty and, more generally, the 'rule of law'; applied, on the other hand, with too little account of the individual situation it may lead to unacceptable injustice: summum ius, summa iniuria ...

24 See for example, to that effect, my Opinion in Palacios de la Villa, cited in footnote 6, points 61 to 63, and the Opinion of Advocate General Jacobs in Lindorfer, cited in footnote 5, points 83 and 84.

25 It should be noted in this context that, as Age Concern England itself admitted at the hearing, Article 6(1) refers, among the examples of potentially justifiable treatment, also to circumstances describing indirect rather than direct discrimination, for example in point (b) of the second subparagraph of Article 6(1) of the directive. The distinction between the justifications provided in Article 2(2) and Article 6(1) respectively is therefore not that of indirect versus direct discrimination.

26 See Mangold, cited in footnote 4, paragraphs 59 and 60, and Palacios de la Villa, cited in footnote 6, paragraphs 64 to 66.

27 Cited in footnote 6, paragraphs 54 to 57.

28 See also, to that effect, the reference by the Court to 'the choice which the national authorities concerned may be led to make' in Palacios de la Villa, cited in footnote 6, paragraph 69.

29 I think the failure to make that distinction accounts for certain confusions and a lack of precision in the present case.

30 Cited in footnote 6, paragraph 68, with reference to Mangold, cited in footnote 4, paragraph 63.

31
Palacios de la Villa, cited in footnote 6, paragraphs 68 to 71.

32 See Palacios de la Villa, cited in footnote 6, paragraph 77; see also, more explicitly to that effect, my Opinion in that case, at point 74.