Since 1 January 2023, according to the EPA, an employee is entitled to remain employed until the age of 69, compared to the previous age of 68. This entails that an employer does not need objective reasons to terminate the employment of an employee who has turned 69 years old.
The notice period after an employee reaches the so-called “EPA age” of 69 years old is one month and the employee does not have a priority right for re-employment. However, the employer is obligated to notify the employee at least two weeks before giving notice of termination, and if the employee is a member of a trade union, the employer must also notify the union. The employee and the union also have the possibility of requesting consultations with the employer regarding the termination.
For an employee who has turned 69 years old, a fixed-term employment or a substitute employment does not automatically convert into an employment for an indefinite term in accordance with the time-limiting provisions of Section 5 a of the EPA.
There is no obligation for an employer to terminate the employment of an employee who has turned 69 years old. If neither party terminates the employment, it will continue unchanged. If the employment continues, the main difference is that the employee essentially lacks employment protection due to the simplified termination process as described above. However, it should be noted that collective bargaining agreements may contain provisions that deviate from the rules set out in the EPA.
Further, the required age for being able to receive general pension benefits has been increased from 62 to 63 years of age since 1 January 2023. This change applies to those born in 1961 or later. An employee can receive general pension benefits while continuing to work.
The reasons for raising the retirement age included the views of the Parliamentary Pension Group that the working life needed to be extended in order to be in line with the increased life expectancy and that pensions needed to be increased and secured in the long term. It was considered necessary to extend the retirement age limit, and thus the employment protection in the EPA.