Employment Law Update (March 2009)
Compulsory Retirement age can be lawful, rules European
Court
The long-running legal challenge by Heyday, a campaigning body
backed by the charity Age Concern, to overturn the U.K.'s national
retirement age has suffered a setback in the European Court of
Justice (ECJ). The ECJ interprets European Union laws.
On the 5th of March, the ECJ ruled that the national
retirement age can be lawful under age discrimination rules,
provided it is justified by meeting social objectives. The case is
not over, however, as U.K. courts now have to decide whether the
U.K. retirement age is, in fact, justified.
A reminder of how the law on retirement
works
Following the introduction of age discrimination legislation in
October 2006, the provision that allows employers to make employees
retire at 65 has been particularly controversial. Employers have to
follow a strict procedure if they wish to ensure an employee
retires, including giving at least six months' notice of retirement
and giving the employee the right to request to continue working
beyond retirement age. However, provided the procedure is followed,
the employer can insist the employee retires at 65.
Compared with the previous situation, which provided no notice
periods or "right to request not to retire", the new law was a
considerable step along the way to eliminating the concept of fixed
retirement ages. The government hoped it would encourage
employers not to automatically retire employees, and to allow those
employees who really wanted to carry on working the opportunity to
make their case to their employer to do so. The government also
said it would review the situation in 2011.
What does the judgment in this case mean?
The "Heyday" case goes a long way to supporting the government's
approach, but it does not mean the law is certain. It will
now be up to courts in the U.K. to decide whether the government
has been reasonable in implementing a national retirement age. This
may take many months. Mentor will keep you informed of further
developments, but if you have any employees approaching the age of
65, you should take specific advice from our Telephone Advice
Service.