Case round-up: Heyday challenge to compulsory retirement

The High Court has upheld the UK’s default retirement age, which allows employers to force workers to retire once they reach the age of 65.

As it stands, any retirement at age 65 or above (or at the normal retirement age for the post if that is higher) is lawful as long as the correct retirement procedure is followed.

The Employment Equality (Age) Regulations 2006, banning age discrimination in employment, came into force in April 2006 to give effect to the European Equal Treatment Directive 2000. However, the UK regulations contain an exception allowing employers to retire employees at 65 or above as long as a retirement process is followed. It’s known as the default or designated retirement age (DRA). Heyday (as it was then, now Age UK, an organisation affiliated to Age Concern) asked the High Court to decide if the DRA was lawful, or contrary to the directive.

Earlier this year, the European Court of Justice said that it was up to the UK courts to decide whether the DRA is lawful. The High Court’s decision is that the DRA of 65 is lawful, but only on the basis that the government reviews it next year.

The court said that having a default retirement age maintains confidence and certainty in the labour market, and that when the age of 65 was set in 2006, it was justifiable based on evidence available at the time.

However, the court said that there was a “compelling case” for raising the DRA or removing it altogether, based on the change in economic circumstances in the meantime. This is likely to mean that, in practice, the default retirement age of 65 has a limited shelf-life.

The government had always intended to review retirement provisions surrounding the DRA, and shortly before the ruling it advised that this was being brought forward to 2010. The court said its decision may well have been different if there had not been not an imminent review or if the regulations had been introduced for the first time in 2009, in which case it would have concluded that a DRA would not have been proportionate.

 Key points

  • If a review of the DRA had not been moved forward, it appears the ruling would have been different.
  • The High Court could not see how the DRA could remain at 65 after next year’s government review.

What you should do

  • Watch out for the government’s review of the DRA in 2010. Given the clear direction in this case, it is likely that the DRA of 65 will not be retained following that review. Although there are calls to abolish forced retirement altogether, this decision does give the government some scope to increase the DRA rather than scrap it altogether. Alternative retirement ages floated in the decision were 68 or 70.
  • Continue to ensure that, when dismissing an employee when they reach the DRA of 65 (or allowing them to work beyond 65), the retirement procedure is followed.

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