The European Union's highest court on Tuesday backed the system of mandatory retirement age to combat high unemployment. In a judgment, the European Court of Justice said that even though discrimination based on age was illegal, the imposition of the 65-year threshold for workers can be justified to stabilize the labor market and if proper pension is provided.

A Spanish manager, Felix Palacios de la Villa, took his company Cortefiel to court when he was notified of his pension two years ago, arguing it amounted to dismissal.

A court statement said that since it was part of national labor measures to promote employment "the legitimacy of such an aim of public interest cannot reasonably be called into question."

If the court had ruled against the pension system, it would have caused widespread disruption of social and economic policies throughout the 27-nation EU.