The UK compulsory retirement age of 65- Is it legal?

The European Court of Justice has given its answer to the question, or at least part of it, of whether the UK’s statutory default retirement age of 65 is legal or not.

In 2006 the Employment Equality (Age Discrimination) Regulations (commonly known as the Age Discrimination Regulations) came into force. Among other matters, these Regulations brought into effect a default retirement age of 65. Prior to this, the setting of a retirement age was purely a matter of contract between an employer and its employee. This is, of course, not to be confused with the age of entitlement to the state pension- which has always been a separate and distinct issue.

Heyday, a branch of Age Concern, began legal proceedings contending that the “forced retirement” age of 65, specified in the UK’s Age Discrimination Regulations is in breach of the EU’s Equal Treatment Directive. Heyday also argued that the general defence of “justification” applicable to the UK’s Age Discrimination Regulations did not properly implement an Article of the Equal Treatment Directive because it failed to include a list of specific aims whereby any apparent age discrimination (such as a required retirement at the designated age of 65) could be “justified.” The relevant Article in the Equal Treatment Directive includes a specific list of such objectives that would justify an act of discrimination.

The European Court of Justice has ruled that the UK’s provisions which allow for a compulsory retirement of employees over a set age DO come within the proper scope of the Equal Treatment Directive, subject to those provisions being “justified by legitimate social policy objectives, such as those related to employment policy, the labour market or vocational training.” The Court rejected the argument that the UK’s Age Discrimination Regulations must include a precise list of objectives that would amount to justification. The Court did not state whether the actual provisions in the UK’s Age Discrimination Regulations for compulsory retirement at age 65 are in fact justified. This matter will now be for the High Court to decide.

In reaching their decision the High Court will have to take the judgment of the European Court of Justice into account, and decide if the Government has a legitimate aim behind the compulsory retirement age, and that the means used to achieve that aim are appropriate and necessary. The burden of proof will be on the Government to establish that they have a legitimate aim in setting the compulsory retirement age at 65 years.

In the prevailing economic environment, with growing unemployment figures, it is clear that the Government is likely to argue that the compulsory retirement age of 65 is necessary (as opposed to a higher retirement age) to provide for opportunities for younger workers to enter employment, and provide greater training opportunities to younger employees. Therefore we think it is unlikely that the High Court will rule that the retirement age of 65 unlawful. However, looking beyond the current recession, it may be the case that the economic and public policy arguments will shift to one of wishing to retain people in work beyond the age of 65. Could this lead to a revision in the Age Discrimination Regulations in a few years from now?

If you require further information or advice on any of the matters raised in this article, please do not hesitate to contact us.