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Claes –v- Landsbanki Luxembourg SA Case C-235/10 Judgment of the European Court of Justice 3^rd March 2011.

The European Court has handed down a very interesting ruling on the scope of the Collective Redundancies Directive 98/59/EEC which is implemented in Ireland by the Protection of Employment Act, 1977, as amended.

The Court gave judgment in Claes v Landsbanki Luxembourg SA Case C-235/10 on the 3^rd March, 2011. The matter was referred by a national court in Luxembourg to the European Court to clarify the effect of the Directive where there is an immediate termination of the employment contracts of a workforce following a judicial decision ordering the dissolution and winding-up of the employer. By its first question, the referring court asked whether Articles 1 to 3 of Directive 98/59 must be interpreted as applying to a termination of activities of an institution that is an employer as a result of a judicial decision ordering its dissolution and winding up on grounds of insolvency, even though, in the event of such a termination, national legislation provides for the termination of employment contracts with immediate effect. The Court stated that under the original Collective Redundancies Directive 75/129, Article 1(2)(d) provided that that directive did not apply to workers affected by the termination of an establishment’s activities where that is the result of a judicial decision. That provision allowed a derogation from the rule in Article 1(1) (a) of that directive, in which it was stated, in terms identical to those of the same provision in Directive 98/59, that, for the purposes of applying Directive 75/129, ‘collective redundancies’ means dismissals effected by an employer for one or more reasons not related to the individual workers concerned. Article 1(1)(b) of Directive 92/56 (the precursor to Directive 98/59) deleted Article 1(2)(d) of Directive 75/129. The Court also noted that that amendment was emphasised by the European Union legislator in the third recital in the preamble to Directive 92/56, which states that Directive 75/129 also applies in principle to collective redundancies arising where the establishment’s activities are terminated as a result of a judicial decision.

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The remarkable flow of case law in 2010 on age discrimination from the European Court of Justice (especially from the influential and significant Grand Chamber) that began with Kucukdeveci v Swedex, in January, continued to the end of 2010, with the judgments in Rosenbladt and Georgiev. There can be no doubt that the Court regards this as a hot topic but the decisions are not tending to go the way of the employee. It will be recalled that McKechnie J in Donnellan v Minister for Justice (unreported July 2008) summarised the position that member states might impose a retiring age by means of domestic legislation, but this had to “compatible and comformable” with the General Framework Directive. The provision enabling the setting of different retirement ages in section 34(4) of the Employment Equality Acts, 1998 to 2004, has therefore to be read in the light of the developing case law from Luxembourg. In Age Concern Case C-388/07; [2009] IRLR 373 the European Court, echoing the earlier Palacio de la Villa case, stated that: “Article 6(1) of Directive 2000/78 gives Member States the option to provide, within the context of national law, for certain kinds of differences in treatment on grounds of age if they are ‘objectively and reasonably’ justified by a legitimate aim, such as employment policy, or labour market or vocational training objectives, and if the means of achieving that aim are appropriate and necessary. It imposes on Member States the burden of establishing to a high standard of proof the legitimacy of the aim relied on as a justification.” Further development of this case law occurred with the two most recent judgments in the autumn.

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