Home      Privacy Policy      Disclaimer

Age Discrimination and the Normal Retirement Age
Introduction

As you may be aware, Regulation 30 of the Employment Equality (Age) Regulations 2006 (the “2006 Regulations”) provides that employees who are 65 or older cannot claim that their dismissal amounts to unlawful discrimination where the reason for dismissal is retirement.  This is provided their employer has complied with the retirement procedure set out in the 2006 Regulations.

The validity of the 2006 Regulations has recently been challenged by Age Concern in The Incorporated Trustees of the National Council on Ageing (Age Concern England) -v- Secretary of State for Business, Enterprise and Regulatory Reform C-388/07 (Also known as the “Heyday Challenge”).  In this case, Age Concern brought judicial review proceedings in the High Court of England and Wales, seeking a declaration that certain parts of the 2006 Regulations are ultra vires in that they do not properly transpose the Directive into national law including, in particular, Regulation 30.  The High Court stayed the judicial review proceedings and referred a number of questions to the European Court of Justice (ECJ) for a preliminary ruling on the interpretation of the Equal Treatment Framework Directive.


Summary of Advocate General’s Opinion 

The Advocate General delivered his opinion on 23 September 2008.  In summary, his opinion on the questions referred by the High Court was as follows:

  • the Equal Treatment Framework Directive is applicable to national rules on retirement;
  • the Directive does not require Member States to list the kinds of differences of treatment on the grounds of age which may be justified;
  • there is no significant difference between the test for justification in respect of direct and indirect discrimination;
  • a national rule which permits employers to dismiss employees aged 65 or over on grounds of retirement can, in principle, be justified if the rule is objectively and reasonably justified in national law by a legitimate aim and the means, put in place to achieve that aim, are appropriate and necessary to achieve that aim.


Dismissal on grounds of retirement 

The Advocate General found that a rule providing for retirement as a fair reason for dismissal can, in principle, be justified under the Directive.  He stated that such a rule may be objectively and reasonably justified in the context of national law, where there is a legitimate aim relating to employment policy and the labour market and the means put in place to achieve that aim appropriate and necessary for the purpose.


Implications for Employers

The Advocate General has rejected Age Concern’s challenge that the UK’s compulsory retirement age of 65 is illegal under EU law.  However,this is not the end of the matter.
Although the Advocate General’s Opinion is highly persuasive, the ECJ is not bound to follow it. The ECJ’s decision in the matter is still awaited and is expected later this year.

Tribunal cases which have been stayed pending the Heyday decision will continue to be stayed until the ECJ delivers its decision.  After the ECJ delivers its decision, the matter will be referred back to the High Court to deal with the Judicial Review.  At this stage, the High Court will have to consider whether the UK’s compulsory retirement age of 65 may be reasonably and objectively justified in national law by a legitimate aim relating to employment policy and the labour market and is appropriate and necessary for that purpose.

Whether the UK’s compulsory retirement age of 65 is objectively justified by a legitimate aim and is appropriate and necessary for that purpose could still be open to challenge.  A recent survey by the Times estimated that 25,000 people who would be forced to retire at age 65 would be happy to stay on at work.  A recent Chartered Institute of Personnel and Development (CIPD) survey found that almost 38% of individuals plan to carry on working beyond 65.  Interestingly, of these, who said they did not plan to work beyond 65, 31% said they would think differently if their employer allowed them to work flexibly.  This highlights the unsuitability of a compulsory retirement age and also begs the question, would a later retirement age of say, 75, be more acceptable or would leaving the setting of a compulsory retirement age to collective agreements or employers have a less discriminatory impact and accordingly be more proportionate?


For further information on the issues covered in this article, please contact either Ciara Dooris, Director or Sharon McArdle, Associate Solicitor, Employment Department  on 028 9055 3300 or e-mail ciara.dooris@tughans.com or sharon.mcardle@tughans.com.