In accordance with the Workers' Statute, to encourage longer working lives, collective bargaining agreements may establish clauses that make it possible to terminate the employment contract when the employee reaches the age of 68 or over, provided that certain requirements are met.
In accordance with the Workers’ Statute, to encourage longer working lives, collective bargaining agreements may establish clauses that make it possible to terminate the employment contract when the employee reaches the age of 68 or over, provided that certain requirements are met.
As you may already know, in general, access to retirement is voluntary. This means that, if an employee wants to continue working despite having reached retirement age, his or her employer cannot force him or her to retire.
However, collective agreements may include so-called “forced retirement clauses”. These clauses do allow the termination of the contract when the employee reaches the age of 68 or over, provided that certain requirements are met.
Collective bargaining agreement clauses referring to the attainment of the ordinary retirement age.
The regulations have been undergoing various changes in criteria regarding the possibility or not of introducing exceptions to the general rule that establishes retirement as a right and not as an obligation.
Law 21/2021, of December 28, on pension reform, and with effect from 01-01-2022, includes some modifications in relation to forced retirement. The new regulation prohibits clauses in collective bargaining agreements that provide for the forced retirement of workers before the age of 68.
Specifically, the tenth additional provision of the Workers’ Statute (ET) establishes that collective bargaining agreements may establish clauses that allow for the termination of the employment contract when the employee reaches the age of 68 or over, provided that the following requirements are met:
a) The worker affected by the termination of the employment contract must meet the requirements demanded by the Social Security regulations to be entitled to 100% of the ordinary retirement pension in its contributory modality.
b) The measure (imposing forced retirement) must be linked, as a coherent employment policy objective expressed in the collective labor agreement, to generational replacement through the indefinite-term, full-time hiring of at least one new male or female worker.
Exceptionally, this limit of 68 years of age may be lowered to the ordinary retirement age when the employment rate of female employees affiliated to the Social Security in any of the economic activities corresponding to the functional scope of the agreement is less than 20% of the persons employed in the same.
The economic activities that will be taken as a reference to determine compliance with this condition will be defined by the codes of the National Classification of Economic Activities (CNAE) in force at any given time, included in the scope of the applicable agreement according to the data provided upon registration in the Register and deposit of collective bargaining agreements and equality plans (REGCON), in accordance with article 6.2 and annex 1 of Royal Decree 713/2010, of May 28, on the registration and deposit of collective bargaining agreements and collective bargaining agreements. The Social Security Administration will provide the employment rate of female workers with respect to the total number of employees in each of the corresponding CNAE on the date of constitution of the negotiating committee of the agreement.
If your collective bargaining agreement has recently been published or amended, check whether it includes this possibility and review what obligations it imposes on you.
The application of this exception (to reduce the forced retirement age in the agreement to the ordinary age) will also require compliance with the following requirements:
a) The person affected by the termination of the employment contract must meet the requirements demanded by the Social Security regulations to be entitled to one hundred percent of the ordinary retirement pension in its contributory modality.
b) In the CNAE to which the person affected by the application of this clause is assigned, there is an employment rate of less than 20% of the total number of employees at the date of effect of the termination decision. This CNAE will be the one applicable for the determination of the contribution rates for the coverage of occupational accident and occupational disease contingencies.
c) Each contractual termination in application of this provision must simultaneously entail the indefinite-term, full-time hiring of at least one woman in the activity.
The decision to terminate the employment relationship will be previously communicated by the company to the legal representatives of the workers and to the affected worker.
The clauses included in the agreements in accordance with the regulations in force may be applied if they remain in force.
The will only apply to collective bargaining agreements entered into as from January 1, 2022. In collective bargaining agreements entered prior to this date, the forced retirement clauses may be applied up to 3 years after the end of the agreed initial term of the agreement in question (in accordance with the ninth transitory provision of the ET).
For further information, please contact labor consulting.
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