Retirement at 65 or not?


10 January, 2008

When the UK government implemented the Employment Equality (Age) Regulations in October 2006, a mandatory retirement age of 65 came with them. This meant that employers could not lawfully dismiss an employee on the grounds of retirement until they reached the age of 65 or beyond. In addition, for the dismissal to be lawful at or beyond 65, the employer is required to follow a statutory procedure.

It was a controversial decision to implement a mandatory retirement age which seemed to some to be a contradiction in light of the purpose of the regulations being to prevent age-related discrimination.

A legal challenge to the UK retirement age was launched by an organisation named Heyday. The Regulations were the result of the UK implementing an EU Equality Directive 2000/78. The essence of the legal challenge is that Heyday argues that having a national default retirement age is unlawful in itself and is not what was intended by the Directive. The ECJ is expected to address the issues relating to this in 2009.

However, following a Spanish case Felix Palacios de la Villa v Cortefiel Servicios the Heyday challenge was put on hold whilst the decision made was referred to the ECJ. The Claimant in that case alleged that he was a victim of age discrimination having been forced to retire at 65 in accordance with Spanish law. It was held in that case that the directive did not apply to national laws which laid down retirement ages. The ECJ upheld the Spanish government's mandatory retirement age confirming that member states have the right to set mandatory retirement ages provided that they can justify those provisions.

It will be interesting to see how the Heyday challenge is determined. They will have to distinguish the UK position from the Spanish case if they are to succeed. It is expected to be some time before a decision is reached.

In the meantime, all claims relating to compulsory retirement in the UK Employment Tribunals are to be stayed pending the outcome of the ECJ decision following a judgment by the Employment Appeal Tribunal in Johns v Solvent SD Ltd.

This leaves the question as to whether employers will be able to continue to lawfully retire people at 65 unanswered. For now it seems, we will have to watch this space.


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