Labour & European Law Review Weekly Issue 382 13 August 2014
Under the EU Equal Treatment Directive, discrimination can be justified if the employer can show they have a legitimate aim and the means of achieving it are appropriate and necessary. In Specht and ors v Land Berlin and ors, the Court of Justice of the European Union (CJEU) held that a transitional pay scheme based on age could be justified because it had the legitimate aim of protecting the acquired rights of existing civil servants.
Mr Specht and his colleagues were appointed as civil servants at various times between 1992 and 2003. Under a provision of German national law, their pay was calculated on a formula based on their age at the time they joined, after which it rose mainly on the basis of length of service.
This law was reformed in 2009 so that it no longer relied on age bands, but instead was based on length of service and performance. New civil servants were allocated an “experience step”, with subsequent steps on the relevant pay scale decided according to experience after the date that the new law came into force. The pay step of existing civil servants, however, continued to be calculated on the amount of basic pay that they received under the old system. As a result, some established civil servants received lower pay than new employees, even though they were in comparable situations.
Mr Specht and his colleagues claimed age discrimination.
Decision of lower court
The Administrative Court of Berlin stayed the proceedings and asked the CJEU to decide whether both the old and new pay schemes were contrary to the equal treatment directive (and if so, whether they could be justified), assuming that the directive covered national rules relating to the pay of civil servants.
Decision of CJEU
The CJEU confirmed that, although it was for the national courts to set the amount of pay for each grade and step, the national rules governing the way in which they were allocated came under the scope of the directive.
The Court then considered the old law and held that, as it gave rise to a difference in treatment that was directly based on age, it was contrary to the directive. Although it agreed that it was a legitimate aim to reward previous professional experience in a standard way, the method used by the German government could not be justified as the sole criterion for initially allocating someone to a particular step in a particular grade was solely based on age.
It also found that the new system constituted direct discrimination as it essentially perpetuated the old system under which some civil servants received lower pay than others because of their age at the date of their appointment. However, the Court held that this could be justified as the new law pursued a legitimate aim - protecting the acquired rights of existing civil servants through the old system.
By adopting these transitional measures, the new law did not go beyond what was necessary to achieve that aim. In the context of Land Berlin’s high indebtedness, and at a national level, in the context of a general attempt at budgetary consolidation, the changes had to be made at neutral cost. Given the high number of civil servants to be reclassified the transition to the new system had to be done without excessive use of administrative resources. In other words, without examining over 65,000 individual cases, which would have taken about 360,000 hours to complete.
The transitional scheme was therefore justified although it was still based on the discriminatory criterion of age.