The multiple fixed-term extension of employment contracts after reaching the statutory retirement age does not constitute age discrimination or abuse of fixed-term employment contracts and is therefore permissible. ECJ, judgment of 28.02.2018, Ref.: C-46/17

The plaintiff in the main proceedings was employed by the defendant as a teacher. According to the contractual provisions, his employment relationship was to end when he reached the standard retirement age. Shortly before reaching the standard retirement age, the plaintiff applied to the defendant for continued employment beyond the standard retirement age. The defendant agreed to extend the employment relationship until the end of the current 2014/2015 school year. Before this time limit expired, the plaintiff submitted another application to extend the employment relationship again for a limited period until the end of the first half of the 2015/2016 school year. The defendant rejected this application. The plaintiff then filed a lawsuit and claimed that the fixed-term employment relationship was in breach of EU law.

The Bremen Higher Labor Court, before which the appeal against the judgment of the Bremen Labor Court is pending, had doubts about the compatibility of Section 41 sentence 3 SGB VI ("Old-age pension and protection against dismissal") with the prohibition of age discrimination under EU law and with the framework agreement on the prevention of abuse through successive fixed-term employment contracts. Section 41 sentence 3 SGB VI, which was newly introduced in 2014, allows the parties to an employment contract to postpone the termination of the employment relationship (even several times) under certain conditions. However, Section 41 SGB VI did not introduce a new objective reason for a fixed term. The LAG Bremen had doubts about the compatibility of the regulation with EU law and had this question reviewed by the ECJ.

The ECJ in Luxembourg ruled that there was no case of age discrimination. The provision in Section 41 sentence 3 SGB VI is an exception to the principle of termination of the employment relationship upon reaching the standard retirement age, which can be contractually agreed. The continuation of the employment relationship beyond the standard retirement age therefore always requires the consent of the employee and employer. The judges were also unable to identify any abuse of fixed-term employment relationships. The regulation guaranteed that the employee in question would continue to be employed under the original conditions and at the same time be entitled to a retirement pension. It was also doubtful whether the extension of the employment relationship could even be regarded as recourse to successive fixed-term employment relationships. It could also be interpreted as a contractual postponement of the originally agreed retirement age.

Date: 6. Mar 2018