A High Court challenge to the mandatory retirement age of 65 means there could be trouble ahead for the government.
After months of consultation and wranglings at the highest levels, the new age laws have already been labelled as incompatible with the EU legislation they aim to implement.
The Employment Equality (Age) Regulations 2006 bring into force the age-related provisions of the European Equal Treatment Directive.
But Heyday, a membership group for baby boomers (people born between 1945 and 1957), has been granted a judicial review of the regulations before the High Court, challenging the mandatory retirement age (MRA), which allows employers to force workers to retire at 65 without giving any reason.
Ailsa Ogilvie, director of Heyday, said the government was sending a stark to over-65s – that “they are not worth having in the workplace”.
“People want the choice to continue to work, but they don’t want to feel they are being given their P45 on the basis of their birth certificate,” she told Personnel Today.
You can see why Heyday is upset. Most people believe the age regulations are designed to protect them against discrimination in their old age. Unfortunately, they are in for a shock. For the first time, employers have a cast-iron excuse to discriminate against those aged 65 and over – and there’s nothing retirees can do about it.
This situation seems to run contrary to the EU legislation, which says “any direct or indirect discrimination based on age… should be prohibited throughout the [EU] community”.
Where the confusion arises is article six of the directive, which adds that EU member states may effectively discriminate on grounds of age if, “within the context of national law, they are objectively and reasonably justifying a legitimate aim… and if the means of achieving that aim are appropriate and necessary”. Then add the fact that “the directive shall be without prejudice to national provisions laying down retirement ages”, and the lawyers have really got something to get their teeth into.
So just what is a legitimate aim, and did the UK already have national retirement ages? And what are the chances the government has mucked it all up?
The Department for Trade and Industry would only say that “the government is confident that the [age] regulations implement the directive correctly”, and points out the MRA will be reviewed in 2011 anyway.
However, the CBI was more than happy to elaborate. Richard Wainer, principal policy officer at the employers’ group, which lobbied hard for a retirement age, said the MRA would create better workplace relations.
“It will encourage dialogue between employers and employees that will lead to a more fruitful and consensual discussion over retirement,” he said. “Abolition [of the MRA] could lead to conflict as companies try to manage people out.”
The CBI believes that having the MRA will help aid workforce planning, adding weight to its assertion that a default retirement age is a legitimate aim. It also argues that the state retirement age already operates as a default retirement age, which the EU directive explicitly recognises as a bona fide reason to discriminate.
It’s difficult to predict how the High Court will approach this matter. A judicial review has only ever once successfully forced the government to change a law. That was back in 1999, when it was successfully argued that a two-year qualification period for a claim for unfair dismissal had an adverse impact on women.
Jane Amphlett, a partner at law firm Addleshaw Goddard, said the courts would be reluctant to declare the government acted illegally, as it would “raise arguments over whether the judiciary is more powerful than the government”.
In this case, the High Court does not seem too perturbed – it has taken the unusual step of granting Heyday a ‘rolled-up’ hearing, which means that a judge will consider the application for the case to proceed in an oral hearing, which, if given the green light, will lead straight into a full trial. Usually, judicial reviews have to wait six months to be heard.
However, as Heyday’s solicitor Andrew Lockley points out, the group is not challenging the whole of the regulations, but just one part, which would limit the impact of any constitutional issues.
Ashley Norman, employment partner at law firm Pinsent Masons, said the whole question should be sent back from whence it came.
“It wouldn’t surprise me if this was referred up to the European Court of Justice – that’s the usual route for employment decisions to be challenged,” he said.
If that comes to pass, then employers will be in for the long haul. In the meantime, businesses might have come to recognise that young employees are harder to find, and they might not have much choice when it comes to keeping older workers on the payroll.
What’s the problem?
- Heyday claims having a mandatory retirement age in the new age regulations is contrary to the European Equal Treatment Framework Directive (Council Directive 2000/78/EC).
- It is challenging articles three and 30 of the UK law, which cover discrimination on grounds of age and the default retirement age respectively.
What is a judicial review?
Judicial reviews are the power of a court to review a law or an official act of a government employee or other public body if it is claimed the law or act is itself illegal. To bring a judicial review, you must show you have ‘sufficient interest’ in the decision.
For more on retirement, see legal dilemma