No age discrimination in ignoring experience with another company in same group when grading pay

Tyrolean Airways Tiroler Luftfahrt Gesellschaft mbH v Betriebsrat Bord der Tyrolean Airways Tiroler Luftfahrt Gesellschaft mbH Case C-132/11 ECJ

age discrimination | pay grading | service with company in same group

The European Court of Justice (ECJ) has held that a clause in a collective agreement excluding professional experience acquired with another company in the same group when grading pay is not discriminatory on the ground of age. 

The Austrian airline Tyrolean Airways, which is in the Austrian Airlines group along with Austrian Airlines and Lauda Air, grades cabin crew in employment categories to determine salaries based on periods of service. A Tyrolean Airways collective agreement provides that advancement from one pay grade to a higher pay grade occurs on the completion of three years' service with Tyrolean Airways. Service with Austrian Airlines and Lauda Air does not count for the purposes of the collective agreement. 

A works council challenged this rule in the Austrian regional court, which asked the ECJ whether or not the Equal Treatment Framework Directive (2000/78/EC) precludes such a clause in a collective agreement. In other words, is it discriminatory to take into account, for the purposes of grading in employment categories and consequently the determination of levels of pay, only the professional experience acquired as a cabin crew member of a specific airline belonging to a group of companies, while excluding identical experience acquired in the service of another airline belonging to the same group? 

The ECJ said that, while such a clause is likely to entail a difference in treatment according to the date of recruitment by the employer concerned, this difference is not, directly or indirectly, based on age or on an event linked to age. It is the experience that may have been acquired by a cabin crew member with another airline in the same group of companies that is not taken into account for grading, irrespective of the age of that staff member at the time of his or her recruitment. That clause is therefore based on a criterion that is neither inextricably nor indirectly linked to the age of employees, even if it is conceivable that, in some individual cases, a consequence of the application of the criterion at issue may be that the time of advancement of the cabin crew members concerned from one pay grade to another pay grade is at a later age than the time of advancement of staff members who have acquired equivalent experience with Tyrolean Airways. 

The ECJ concluded that the Equal Treatment Framework Directive must be interpreted so as not to preclude a provision of a collective agreement that takes into account only the professional experience acquired as a cabin crew member of a specific airline belonging to a group of companies when grading pay. 

Additional resources

• Case law: age discrimination Other important cases on age discrimination reported in the XpertHR case reports section include:
  • Homer v Chief Constable of West Yorkshire Police [2012] UKSC 15 SC The Supreme Court held that a requirement that employees obtain a law degree before they could be promoted to the highest grade was indirect age discrimination against the claimant, who did not have enough time to complete a degree before he reached the employer's retirement age. 
  • Seldon v Clarkson Wright and Jakes [2012] UKSC 16 SC The Supreme Court provided guidance on the components needed to justify a compulsory retirement age, stressing that the chosen retirement age has to be appropriate and necessary in that particular business. 
  • Woodcock v Cumbria Primary Care Trust [2012] IRLR 491 CA The Court of Appeal held that the employer was justified in dismissing a senior member of staff, who had been at risk of redundancy for some time, before he reached the age of 50 to avoid paying a pension "windfall". 

Case transcript of Tyrolean Airways Tiroler Luftfahrt Gesellschaft (on the BAILII website)