Is age discrimination already illegal?

Following the publication of the final age discrimination regulations, businesses have no excuse but to ensure they are fully prepared for their implementation on 1 October. However, a recent ruling in the European Court of Justice (ECJ) suggests that the age discrimination laws are already in force.

The Framework Directive, requiring member states to introduce legislation to ban age discrimination, was adopted in November 2000. Many countries, including the UK, have taken the benefit of an extended implementation period to the end of 2006. But a recent German case – Mangold v Helm – has raised serious doubts about when the regulations become law.

The case concerned legislation to protect workers on fixed-term contracts. In 1996, Germany introduced new laws regarding fixed-term contracts, but the regulations provided much less protection for workers over the age of 57. In 2001, protection for workers over the age of 51 on fixed-term contracts was also reduced.

Double jeopardy

While this legislation is clearly discriminatory on the grounds of age, one might expect it to be legal, at least until the end of the implementation period in December 2006. However, the ECJ decided that it was illegal for two reasons.

First, the court relied on the established law that, during the implementation period for a directive, member states should not introduce legislation that works in the opposite direction, as had happened in this case. More importantly – and much more surprisingly – the ECJ concluded that age discrimination was already contrary to EU law because it is contrary to international law. The court indicated that the Framework Directive was merely about the introduction of practical measures to tackle age discrimination and to permit affirmative action.

This means that any part of a member state’s legislation that includes unjustified age discrimination is already illegal and cannot be relied upon even before the end of the implementation period. While this in itself is surprising, there are more serious implications for UK companies to consider.

On the face of it, this judgment appears to apply not just to laws passed by national governments, but also to any dispute about age and employment between an employer and an employee.

In practice, this means that the ECJ ruling would apply in a UK employment tribunal considering an age discrimination claim six months before our age legislation is due to come into force.

The decision also gives a strong indication as to what will be considered “justified” grounds for age discrimination. Under the directive, age discrimination can be legal where it is “objectively and reasonably justified by a legitimate aim”, such as protecting older workers.

The ECJ confirmed that, in principle, the German legislation might have been justifiable, but in this instance the simple age-based rule was far too crude. This sends a warning to employers that were hoping to rely on the provision for justified age discrimination. Detailed and convincing arguments from employers will be needed to demonstrate the importance of the aim and that less discriminatory measures would not achieve the desired end.

Uncertainty rules

One area in which this ruling might have an impact for UK businesses is compulsory retirement.

Until age discrimination provisions come into force this October, employers should be careful whenever they insist an employee retires on reaching normal retirement age. While there would be additional arguments to prove that this remains legitimate, the situation is now uncertain.

Mangold v Helm: key implications

  • It is possible that age discrimination is already illegal and would give rise to a right to claim compensation in the tribunal unless it could be justified.

  • The ECJ is likely to maintain a demanding standard in assessing when discriminatory provisions and practices are justified.

  • Businesses cannot afford to delay their preparations for age discrimination.

  • Employers are advised to tread carefully in the area of compulsory retirement.

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