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Legal Q&AEquality, diversity and inclusionAge discrimination

Heyday’s age discrimination case

by Personnel Today 23 Jan 2007
by Personnel Today 23 Jan 2007

The Heyday ageism case firmly put the spotlight on the way the age regulations have been implemented in the UK. But what is the potential impact of the case for employers?



Q What is the background to the Heyday case?


A The Employment Equality (Age) Regulations, which came into force on 1 October 2006, contain a number of important exceptions. Age Concern – under the banner of its offshoot group Heyday – alleges that many of those exceptions are not permitted by the European Framework Directive on equal treatment. If the European Court of Justice (ECJ) agrees, then the UK government will have to rewrite the age regulations.


However, this situation may be much more serious for public sector employers, since European law means that these employers probably cannot rely upon any “incorrect” part of the regulations.



Q What is the specific challenge to the regulations?


A Heyday has challenged two aspects of the regulations. The first is the default retirement age of 65, at which any employer can require employees to retire. Heyday argues that this is not permitted by the directive.


The second challenge is about the UK’s approach to direct age discrimination. The regulations state that this is permitted if it is “a proportionate means of achieving a legitimate aim”. Heyday points out that the framework directive gives a list of specific examples of what might be justifiable direct discrimination, and goes on to argue that the directive requires each EU member state to come up with a specific list of particular instances – for example, imposing a minimum or maximum age for health and safety reasons.


Q What is the UK government’s position on the issue?


A The UK government argues that fixing a default retirement age was justified for two reasons. The first is workforce planning: it is advantageous to have a target age for retirement against which employers and employees can plan. Employers can manage against a known attrition profile, and can reduce the risk of blocking promotion for younger workers, while employees are encouraged to make provision for retirement because they cannot be sure of working beyond 65.


Second, the government says that a default retirement age is justified to reduce the risk that, faced with the cost of providing pensions and insurance benefits for older employees, employers would simply remove such benefits from all staff.



Q What is the next stage in the process?


A In December 2006, a High Court judge agreed to refer Heyday’s challenge to the ECJ. We now know that we will be getting a European ruling on this issue. But we will have to wait until well into 2007 or even 2008 for the outcome.



Q What would a victory for Heyday mean for employers?


A If the European Court agrees with Heyday’s challenges, then the government will have to amend the age discrimination legislation. However, the problem for public sector employers is that European jurisprudence normally regards all public sector employers as already bound by the true intent of the directive – even if the UK regulations are wrong.


This could leave public sector employers facing thousands of backdated claims for age discrimination.



Q What should public sector employers do in the meantime?


A The only totally safe course of action is not to require any employee to retire unless they want to, and to eliminate any direct age rules unless they are specially covered by the regulations – for example, on pensions and redundancy payments. But this is unrealistic in practice. It is very unsatisfactory that employers doing their best to obey the law may find themselves saddled with expensive age discrimination liabilities.



Q Have there been any similar challenges to the age regulations in other parts of Europe?


A A similar question about compulsory retirement was referred to the ECJ by judges in two Spanish cases some time ago. The court heard legal argument in one of those cases on 21 November 2006. Although the ECJ is unlikely to give a ruling for some time, we can expect to know the advocate-general’s opinion on the case early this year. Although the court does not have to follow his or her lead, that initial opinion will often signify how it is likely to rule. The outcome of the Spanish cases will, in turn, influence the decision of the European Court when it comes to scrutinise the challenge from Heyday.


By Owen Warnock, employment law partner, Eversheds

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