Germany: Age-Based Termination Legal With Employee Agreement, Compensation, Court Holds

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By Andrea Barbara Schuessler

April 24— Terminating an employee based on age is legal if the employee has consented and been compensated, the state labor court of Baden-Wuerttemberg ruled in a decision published April 11 (LArbG Baden-Württemberg, ruling of March 4, 2015, 2 Sa 31/14).

Automaker Daimler has limited employment of older managers to age 60 since 2013. A Daimler manager who signed an agreement accepting a cash payment in exchange for mandatory retirement later argued that the limitation of her employment contract was unlawful.

Christopher Hülsmann, a labor lawyer with PricewaterhouseCoopers in Duesseldorf, told Bloomberg BNA in an April 22 telephone interview that German employment contracts can be limited to two years regardless of age under the law on part-time and limited employment contracts, setting a precedent for mandatory retirement.

In the Daimler case, it would be decisive that the employee accepted a cash payment in return for agreeing to retire at age 60.

To contact the reporter on this story: Andrea Barbara Schuessler in Berlin at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

Full text of the Daimler ruling is available at http://lrbw.juris.de/cgi-bin/laender_rechtsprechung/document.py?Gericht=bw&nr=19244 , the law on part-time and limited employment contracts at http://www.gesetze-im-internet.de/tzbfg/__14.html, both in German.

For more information on German HR law and regulation, see the Germany primer.