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Age discrimination – but no compensation

December 2011 - Employment. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

More articles by this firm.

by Yvonne Frederiksen

Although an employee was discriminated against by not being paid statutory redundancy pay, he was not entitled to compensation under the Danish Anti-Discrimination Act.
The EU Court has previously ruled that the prohibition on age discrimination contained in the Employment Framework Directive (Directive 2000/78/EC) precludes national provisions which prevent employees from receiving statutory redundancy pay from their employer on termination because they are also entitled to employer-paid retirement pension. A Danish employer could therefore not refuse to pay statutory redundancy pay citing the provision in section 2a of the Danish Salaried Employees Act, which provides that no redundancy pay is payable if the employee is entitled to employer-paid retirement pension and joined the pension scheme before age 50.
When the EU Court ruled, the employer paid the redundancy payment to the employee and thought that was that. But the employee did not see things the same way and claimed about EUR 6 700 in compensation for age discrimination.
The question before the Danish High Court was therefore whether the employer’s initial refusal to pay statutory redundancy pay could be characterised as a separate breach of the Danish Anti-Discrimination Act entitling the employee to compensation.
The employee believed his employer had breached the Danish Anti-Discrimination Act by not paying redundancy pay until after the EU Court had ruled in the matter. The employer, on the other hand, argued that the employee was not automatically entitled to compensation since the employer had simply acted in accordance with current Danish employment law. In addition, the employee had received his redundancy payment immediately after the EU Court’s ruling.
Questionable question
The Danish High Court held that the employer was in breach of the Danish Anti-Discrimination Act for refusing to pay redundancy pay the first time around because the employee was entitled to retirement pension from the employer.
However, the High Court sided with the employer on the issue of compensation, noting that this was a questionable question of statutory interpretation, that the redundancy payment was made immediately after the EU Court’s ruling and that the employer’s breach of the Danish Anti-Discrimination Act was relatively minor. Accordingly, the employee was not entitled to compensation.
Norrbom Vinding notes:
  • that the Danish High Court’s judgment has been awaited with excitement in Denmark and it has now been established based on the EU Court’s ruling that the refusal to pay redundancy pay constituted a breach of the Danish Anti-Discrimination Act; but

  • that the issue was so doubtful that employers who have adhered to current Danish law are generally not required to pay compensation for breaches of this nature; and

  • that it is still not absolutely clear whether employees are entitled to redundancy pay under section 2a of the Danish Salaried Employees Act in other similar situations, but that there is a large number of cases pending, which are expected to clarify the current state of play, and that a task force is expected in early 2012 to issue its report to the Danish Minister for Employment with recommendations as to whether section 2a of the Danish Salaried Employees Act should be amended.
The above does not constitute legal advice and should not be relied upon as such

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