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Monday, May 27, 2024 | Back issues
Courthouse News Service Courthouse News Service

Retirement-Age Workers|Also Entitled to Severance

(CN) - Danish workers who are entitled to retirement benefits but don't intend to quit working can also collect severance pay, the European Union's Court of Justice ruled.

Danish national Ole Andersen worked for the Region of Southern Denmark for 27 years when he was let go, unfairly, as was later determined in arbitration.

Andersen applied for severance pay, since Danish law provides that anyone working for more than 12 years has a right to it. The severance allowance ranges from one to three months' salary, depending on years put in.

Andersen's former employer refused, saying that because Andersen was 63 years old, he could collect retirement benefits. But Andersen didn't intend to retire right away and registered as a job seeker.

His labor union sued over the severance pay issue on his behalf, and the national court referred the question to Europe's high court.

The Luxembourg-based Court of Justice determined that the practice of denying severance pay to those eligible for retirement benefits constitutes age discrimination.

The court then reasoned that, in principle, this could be justified in typical situations, where severance pay acts as a bridge to a new job or those reaching retirement age stop working.

But the practice of denying severance payment to someone who is eligible for a pension but chooses not to receive it directly after ending a job is unreasonable, the court concluded.

As a member of the EU, Denmark is bound to change its policy to match the court's decision.

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