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Setback in age reform

25 March 2009
Actually, any decision other than that reached by the European Court of Justice (ECJ) would have been a major step into the unknown, leading to a possible significant increase in the working population at a time that would least suit the government and the tax payer.

Background

The UKs Employment Equality (Age) Regulations (EE(A)R) permit employers to impose a compulsory retirement age for employees of 65. Heyday, part of Age Concern, launched a claim that this was contrary to the European Directive on discrimination, on grounds of age. They said their claim reflected the public opinion in a survey they carried out.

The case was referred to the European Court by the High Court in 2006, leaving around 260 tribunal cases on hold, awaiting the outcome.

The decision of the ECJ

The ECJ has ruled that member states can impose a compulsory retirement age if they have a legitimate aim, justified by social policy objectives, and the compulsory retirement age is an appropriate and necessary way of achieving this aim. The case will now be referred back the High Court in London for a decision on this point.

So we have not moved forward from when we reported the Advocate-Generals opinion. A compulsory retirement age is permissible if a member state can justify it.

Any guidance so far?

The UKs compulsory retirement age only applies to employees and certain other limited categories of worker. It does not apply to judges and partners. In these cases a compulsory retirement age must always be justified. This has led to a small number of cases regarding justification being reported already.

Hampton v Ministry of Justice concerned a court recorder, and Seldon v Clarkson Wright and Jakes concerned a partner in a law firm; both were retired at age 65. The tribunals in both cases, decided that the aims which the respondents claimed justified the compulsory retirement, were legitimate. In Hampton, this was to maintain a reasonable flow of new appointments; and in Seldon it was to ensure collegiality between partners, i.e. they avoided the ignominy of having to tell a partner whose performance was declining that they ought to leave. Neither were able to show that the provision was proportionate or reasonably necessary to achieve those aims.

It seems the problem in both cases was lack of evidence to back up the impact of allowing employees to stay on beyond retiring age. However, the only sure way of obtaining the evidence would be to allow people to stay on and see what happens.

Challenges to retirement ages have now become de-rigueur for those about to be retired. Two High Court judges are challenging their enforced retirement at age 70.

The High Court decision

The High Court must now decide whether a national default retirement age of 65 is appropriate and necessary to achieve some legitimate aim. The tribunal cases so far may help to identify factors which might justify the default retirement age but the government will somehow have to find evidence that those considerations apply nationally, and not just in those workplaces.

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