ECJ Decision on Heyday Challenge to statutory retirement age

Updated March 2009

The ECJ has given its judgment in The Incorporated Trustees of the National Council for Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform (also known as the Heyday Challenge). In this case, the ECJ considered the validity of the UK's statutory retirement age of 65.

The ECJ held that, in principle, a statutory retirement age of 65 can be justified. The case will now return to the House of Lords who will have to determine whether current law, which allows the retirement of workers at the age of 65, can be justified.

Background

The National Council on Ageing, operating as Heyday, is seeking a judicial review of the Employment Equality (Age) Regulations 2006 (Age Regulations), and a declaration that parts of them do not comply with the UK's obligations under the Equal Treatment Framework Directive (the Directive) imposed by the European Courts. The Directive establishes a general framework for equal treatment in employment.
The case went all the way to the House of Lords, which subsequently referred certain questions to the European Court of Justice (ECJ). Any claims of age discrimination following a retirement at 65 or over have been postponed pending the outcome of this judicial review. One of the questions referred to the ECJ was whether the scope of the Directive permits employers to dismiss employees aged 65 or over by reason of retirement.

The Advocate General gave his opinion on 23 September 2008. His view was that a national rule that permits employers to dismiss employees aged 65 or over for retirement can, in principle, be justified. It's no real surprise that the ECJ have agreed.

Decision

On 5 March 2009, the ECJ delivered its judgment, following the Advocate General's opinion on all of the questions referred to it, including:

Do the national rules on retirement fall within the scope of the Directive?

The Age Regulations provide that:
 

• A worker who is 65 or over and who is dismissed for retirement will not be considered unfairly dismissed (regulation 30).
• It is lawful for an employer not to recruit someone who is, or would be within six months of being recruited, 65 (regulation 7).
• These rules, according to the ECJ, fall within the scope of the Directive.

Comment

The ECJ's judgment has a limited impact given that it follows the Advocate General's opinion, and since it is only a preliminary ruling in this case. The real interest in Heyday's challenge will be at the next stage, when the House of Lords has the task of determining whether the retirement of workers at the age of 65 is justified by a legitimate aim and whether the means of achieving that aim are appropriate and necessary.

However, it is interesting to note the ECJ's consideration of what might, or might not, be considered a legitimate aim. It describes aims involving social policy objectives which have a "public interest nature" as being legitimate, as opposed to "individual reasons particular to the employer's situation", which, by implication, are not.

It is also important to note the ECJ's warning that while member states have a reasonable amount of discretion when it comes to choosing legitimate aims involving social policy, they are required to establish to a high standard of proof the legitimacy of any aim pursued. In this case, therefore, the Government will have to establish, to a high standard of proof, the legitimacy of the aim relied on as justification for retiring workers at 65. At this stage, however, it seems unlikely the law will be changed.

Regardless of what happens in this case, the Government is committed to reviewing the retirement age in 2011 and it may be that the retirement age of 65 is scrapped altogether.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2009. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.