Israel: Supreme Court Rejects Petition to Annul Mandatory Retirement

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By Jenny David

May 25—Israel's Supreme Court has unanimously ruled that mandatory retirement at age 67 does not discriminate against the elderly (Ruling 9134/12). At the same time, however, the seven-justice panel suggested that the contentious issue be reexamined by parliament, and justice Neal Hendel called for the creation of a new government commission to revisit the issue.

The injury to the principle of equality caused by mandatory retirement “is broad, fundamental and deep,” Hendel said in the court's ruling. “Freedom of occupation, creativity and personal expression—which reflect another prominent aspect of human dignity—are also injured, and severely.”

Nevertheless, the court held that the harm caused to older workers by mandatory retirement was proportionate when offset against other considerations, such as opening jobs for young people and allowing those who wish to receive pensions at a younger age to do so.

Also important in the court's ruling, a bill is pending in the Israeli parliament that would replace age-associated mandatory retirement with an occupational test, and the government has formed a committee to examine the general issue of retirement in view of increased longevity. The court accepted the state's position that the issue would be better addressed by the parliament in the context of a broader discussion of appropriate retirement ages and conditions.

'Chaos in Labor Relations'?

Employers broadly supported the ruling, saying the absence of a mandatory retirement age would require them to address each employee's retirement status individually and open them up to ongoing claims of age discrimination.

“Eliminating mandatory retirement age would create chaos in labor relations,” Uriel Lynn, president of the Federation of Israeli Chambers of Commerce (FICC), told Bloomberg BNA May 16. “Employers would have to be constantly testing the capabilities and skills of workers who want to work beyond age 70” and would be subject to “an intolerable amount of hearings and discussions in view of employees' desire to continue working without any age limit.”

“The uncertainty would harm employers and employees alike,” added Sigal Sudai, head of the FICC's Labor Relations Department. “Leaving mandatory retirement at 67 is the lesser evil for now.”

FICC is promoting a compromise: an increase in mandatory retirement to age 70 or more combined with new legislation that would allow workers above the current retirement age (62 for women and 67 for men) to opt into retirement without the act being considered a resignation under labor law with its consequent loss of compensation rights.

Such a move “would prevent infringements of the individuals' pursuit of autonomy, while massively increasing participation in the labor force and raising per capita GDP,” Lynn said.

Not a ‘Secondary Right'

Despite the court defeat, the petitioners called the ruling a “precedent” and a “harbinger of hope.”

“The court's decision is an important step in the campaign to outlaw forced retirement based on age,” employment attorney Shoshana Gavish—who petitioned the court on behalf of her husband, Technion Institute of Technology Professor Moshe Gavish, and a group of the country's best known academicians and jurists—said in response to the ruling. “The issues of the right to work and injury to the right to work” are “no longer a secondary right or a trifling injury, but a constitutional right and a severe injury.”

“Forcible retirement at age 67 reflects, in the court's eyes, a balance between competing legitimate interests which is within the range of reasonableness, despite judicial criticism of the sweeping and wide language of the law that does not distinguish between the different situations of employees who reach compulsory retirement age,” Gavish continued. “Though the court did not annul the law, its decision does convey the need to reexamine the balance” among competing interests.

To contact the reporter on this story: Jenny David in Jerusalem at correspondents@bna.com

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

For More Information

Ruling 9134/12, Prof. Moshe Gavish et. al. v. the Israeli Parliament et. al., is available in Hebrew here.

For more information on Israeli HR law and regulation, see the Israel primer.