Compulsory Retirement Age can be justified-Decision of Advocate General.

24th September 2008 Employers and the UK government will be sighing with relief at the decision of the Advocate General to the European Court of Justice which states that the UK government was permitted to set a default compulsory retirement age in its “age discrimination“  regulations.
The UK government was obliged to introduce regulations to implement the European Equal Treatment Framework Directive in 2006. They did this through the Employment Equality (Age) Regulations.  These Regulations introduced into the UK, a default compulsory retirement age. Until then, there had been no statutory requirements concerning retirement. The age at which a person could take the state pension had in practice usually been used as the normal retirement age in most businesses. However, there had been nothing under statute designating a normal retirement age.
Under the Regulations introduced in October 2006, an employer may specify a normal retirement age for its staff, but in the absence of such the regulations specify a normal retirement age of 65 years. The Regulations permit employees to work beyond the normal retirement age with the approval of their employer. Employers are required to notify any employee that is approaching the normal retirement age of the fact that the normal retirement date is approaching, and also of the right to request to work beyond that age. Employers are not obliged to allow employees to work beyond the normal retirement age. In addition, the Regulations do not oblige employers to give reasons for rejecting any request to work beyond the normal retirement age.
Age Concern has challenged the validity of the Regulations. They argue that the Regulations fail to properly implement the Equal Treatment Directive by, amongst other matters, including a compulsory retirement provision at the age of 65.
Age Concern argue that many people will have to work beyond 65 in order to make ends meet, pointing to the fact that there are over 1 million people over 65 working, and that with a decline in the economic situation many more are likely to need to generate an income above the amount that any pension can bring in order to meet their living costs. 
The Equal Treatment Directive requires the UK, and other members of the EU, to specify the kinds of treatment which may be regarded as justifying conduct, or decisions that would otherwise be discriminatory. 
In his decision the Advocate General has stressed that the members of the EU, including the UK, have a wide discretion in the means they chose to use to achieve a legitimate aim relating to employment and social policies. He has decided that the UK, in setting a normal retirement age of 65 in the Regulations was exercising this discretion legitimately.
The decision of the Advocate General is not the final stage of the process in the European Courts. He acts as an adviser to the court, and the final decision from the main court is not expected until early in 2009. However, the main court usually follows the opinion expressed by the Advocate General. There are a number of cases in the UK which are now suspended until the final decision from the main court on this issue.
The CBI has argued that a normal retirement age of 65 is an essential management tool, and points to the fact that the Regulations allow employees to ask to work beyond that age anyway.
Common sense suggests that if an employer requires the skills of an employee that is at retirement age then it will retain that employee. There is often a good business argument for having a workforce with a range of ages, and experience, as the experienced staff can guide and train the new staff.
Employers need to be aware of the rules regarding the retirement process. If they fail to conduct that process properly they can end up with a situation where the individual could claim that he or she has been unfairly dismissed. The key to this is to have and implement a retirement policy and procedure consistently and fairly.    
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