Mr. Félix Palacios de la Villa, born in 1940, worked as a director for Spanish garment company Cortefiel. When Spain passed a law introducing a legal retirement age of 65, he was notified that his contract was going to end after almost 25 years of working for the company. In spite of the fact that he had already worked long enough in his life to obtain full retirement pension, Palacios would have liked to stay in his job.
Palacios argued that this notice was similar in nature to a dismissal on age grounds, which he considered to be in breach of the EU's anti-discrimination rules, in particular the 2000 Directive on equal treatment in employment and occupation, which prohibits "discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation".
Due to this argument, the Madrid Juzgado de lo Social No 33 referred the case to the European Court of Justice. On 16 October, the Court's Grand Chamber ruled that the directive's rules prohibiting age discrimination do not preclude national legislation pursuant to which compulsory retirement clauses contained in collective agreements are lawful. The Court added, however, a number of criteria that must be met:
- The measure, although based on age, must be "objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market", and;
- "the means put in place to achieve that aim of public interest do not appear to be inappropriate and unnecessary for the purpose".
