Compulsory retirement back on the agenda
The year 1980 marked the first time the Workers’ Statute included the possibility of providing in a collective labor agreement for the termination of an employment contract on reaching the ordinary retirement age. Following a debate on the lawfulness of the measure, since it was deemed potentially discriminatory on grounds of age, the Constitutional Court ultimately upheld the measure on the understanding that the workers concerned were entitled to a pension and, in turn, employment opportunities would be offered to the jobless.
Nevertheless, Law 12/2001, of July 9, 2001 repealed this measure, arguing the need to guarantee job stability and stressing the new demographic reality.
Barely four years later, at a time when the public coffers were in good shape, Law 14/2005, of July 1, 2005 once again made it possible to make provision for compulsory retirement in collective agreements. This time round it was argued that Directive 2000/78/EC supported differential treatment on grounds of age where it was justified by a legitimate aim, thus allowing for compulsory retirement where it was linked to objectives in keeping with the employment policies set out in the collective labor agreement (bringing into play measures to improve job stability, convert temporary contracts into indefinite-term contracts, ensure sustainable employment, encourage new hiring and any others measures aimed at enhancing the quality of employment).
Lastly, recent Law 3/2012, of July 6, 2012, on urgent measures to reform the labor market (ratifying in this aspect Royal Decree-Law 3/2012, of February 10, 2012) rendered null and void any future collective labor agreement clauses providing for the possibility of terminating employment contracts due to reaching the ordinary retirement age. The justification for this latest about-face is probably due more to purely financial, rather than legal, reasons. At a time of stricter control of the public deficit and the adoption of measures to shore up the social security system, there is a need to stem the worrying decline in revenues from social security contributions (needless to say, newly-hired workers have lower contribution bases than those of their retired counterparts) and the constant and considerable strain on the public purse in the form of pensions for recent retirees.
