The statutory retirement age of 65 probably has equal numbers of supporters and detractors, with employers and older employees on opposite sides of the debate.
Following the advocate-general’s opinion in the case brought by Heyday challenging the legitimacy of the default retirement age, neither side can yet claim a victory, although the government may well be claiming a win on points at least.
ECJ ruling
Heyday (a spin-off of charity Age Concern) is challenging the statutory retirement age on a number of grounds, but in particular that it is incompatible with the European Directive prohibiting age and other forms of discrimination.
The UK government is arguing that the directive expressly allows for a statutory retirement age, even where on the face of it, such a provision discriminates on the grounds of age.
The advocate-general considers that a national rule to deal with retirement age is permitted under the directive, provided “it [is]….a proportionate means of meeting a legitimate aim”. He supports the UK government’s view that such a rule can potentially be justified where it relates to employment policy and the labour market, and is an appropriate and necessary means of achieving that aim. Member states have a “relatively wide discretion” in working out how best to achieve their legitimate aim.It is important to note however, that the advocate-general did not say that the UK government was justified in having a statutory retirement age of 65, as he was not asked to address that question.
The matter will go before the European Court of Justice (ECJ) in the New Year, and on past experience, it seems likely, although not guaranteed, that the ECJ will follow the advocate-general’s view. If so, the case will be sent back to the UK national courts. It is at that point that the question of whether the default retirement age of 65 is justified will be addressed.
In the meantime…
Until the case is determined by the UK courts, employers will remain in a state of flux, and given the current economic climate, will not welcome the additional delay while we await the final outcome. Where employers have had claims brought against them in the tribunals already regarding the retirement age, those claims will remain stayed until the UK courts reach their decision on justification.
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Those with staff approaching retirement age will need to consider how best to proceed in light of the advocate-general’s opinion. In reality, there are three options:
Continue with compulsory retirement
Employers that are feeling bullish, who may well draw comfort from the advocate-general’s opinion, may choose to continue to retire employees compulsorily at age 65.
Ignore the retirement age altogether
After two years of implementing the default retirement age, employers may feel uncomfortable doing this. It would introduce considerable uncertainty into workforce planning and is likely to prove contentious for the ambitious mid-level managers looking for promotion to the senior jobs. As such, it may not be a serious option for most employers.
Allow (more) requests to work beyond retirement age
When agreeing such requests, employers can set revised retirement ages, rather than allowing open-ended extensions, or seek to agree short extensions. While this option involves more management and HR time, in the long run, it may do more to meet the needs of those employees who either wish, or financially need to keep working, and as such may well minimise the prospect of future claims.
Key points
Having a statutory retirement age is permitted under EU law.
Such a provision needs to be justified by reference to a legitimate aim, such as workforce planning, and needs to be a proportionate way of meeting the aim.
If the ECJ agrees with the advocate-general, it will be for the UK courts to determine whether the UK retirement age is justified.
Such a decision is not expected until next year.
