Ruling goes against retirement age legal challenge

Employers will still have the right – for now – to ask employees to retire at the age of 65 following a judgement in the High Court.

The challenge to the legislation, which was introduced in October 2006 and which allows employers to end the employment of anyone aged 65 or over without compensation or the risk of a claim for unfair treatment provided the correct procedures are observed, was brought by charities Age Concern and Help the Aged.

An attempt to overturn the legislation, which the charities argued is in breach of the EU’s Equal Treatment at Work Directive, had already been rejected by the European Court of Justice which ruled that the default retirement age (DRA) was acceptable provided that there was a “legitimate aim” to the law linking it to social or employment policy.

As a result the case returned to the UK’s High Court.

The charities maintained that enabling employers to set a mandatory retirement age – 65 – at which employees can be forced to leave work, even if they are willing and able to carry on working, gave firms and organisations too much leeway in justifying direct discrimination on the grounds of age.

Under current regulations, employees who reach their 65th birthdays are entitled to request to continue working, but employers are not required to accept the request or to offer reasons for not doing so.

Ruling on the case, Mr Justice Blake decided that the default retirement age does comply with the Directive and that it was “legitimate and proportionate” for the government to introduce it.

However, the judge also went on to say that he did not believe that 65 would have been chosen as the default age had it been set today.

Mr Justice Blake added that his ruling may have been different had the government not announced plans to bring forward a review into the default retirement age to next year.

He described the arguments for increasing the age as “compelling” and said that he could not see how 65 could remain as a DRA after the review.

In response, the charities urged the government to use the Equalities Bill, which is going through Parliament, to drop the law.

Andrew Harrop, head of public policy at Age Concern and Help the Aged, said: “The ruling does not spell the end of our campaign to win justice for older workers – in fact, we will be stepping up our fight to get this outdated legislation off the statute book.

“Despite the judgement, ministers still have the opportunity this side of a crucial general election to give real help to people in their 60s by outlawing forced retirement. They should amend the equality bill which is currently making its way through parliament.”

Andrew Lockley, of the law firm representing the charities, commented: “The judge has effectively given the government breathing space to go away and change the rules. But his comments that he cannot see how the DRA can stay at 65 will give renewed hope to thousands of workers approaching that age.”

Employers, though, welcomed the ruling.

Adam Marshall, director of policy at the British Chambers of Commerce (BCC), said: “This was the right decision. The vast majority of businesses value their older employees and the considerable experience that they can bring to a firm. We do not believe there is evidence of widespread use or abuse of the system; only 1 in 4 businesses we surveyed use the default retirement age.

“Employees already have the right to request to postpone their retirement, and we believe the existing rules allow for the fairest outcome on both sides. Businesses need a period of stability to allow all the recent changes to employment legislation to bed down. They don’t want more tinkering with employment rules.”

John Cridland, the CBI's deputy director-general, said: “This judgment is a vital victory for common sense, and it supports the approach that employers already take to retirement. Businesses don’t want to lose good people, whatever their age.

“Eight out of 10 people who ask to work beyond 65 see that request accepted. Defeat for the government today would have created an unworkable situation that would have fuelled litigation and resentment.

“A default retirement age helps staff think about when it is right to retire, and also enables employers to plan more confidently for the future. In certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone. Next year’s review will have to address these good reasons why we have the existing law.”