Heyday and the mandatory retirement age
February 9, 2009
If you work in HR or are an employer, you will probably have heard about the famous case relating to the default UK retirement age that has been made by Heyday, which is part of the charitable organisation Age Concern. Here is an explanation of the background to the case, and where it leaves UK employers at the moment:
What is the basis for the case?
The case was brought by Heyday to the High Court, to challenge the mandatory retirement age of 65 that the UK currently has. The mandatory retirement age forms part of the age discrimination regulations that came into force in October 2006, and means that at the moment employers can legally dismiss employees over the age of 65 by reason of retirement (without any other justification), as long as they follow the correct procedure. The mandatory retirement age is due to be reviewed in 2011 but the case brought by Heyday is bringing the question of whether this aspect of the UK law complies with the Equal Treatment Framework Directive (EU Law) forward. The question is to do with the interpretation of the European Directive – and Heyday is arguing that the Directive has been incorrectly interpreted by the UK government when the age discrimination regulations were implemented. Heyday argues that it is against the principle of age discrimination to allow employers to dismiss employees simply because of their age.
What has happened so far?
In July 2008 the High Court referred the question of whether the mandatory retirement age is lawful to the European Court of Justice (ECJ). In September 2008 the Advocate-General, who is responsible for making recommendations to the ECJ on these sorts of rulings, gave his opinion, and it was not good news for Heyday. The Advocate-General said that whilst he agreed that the retirement provisions as stated in the UK age discrimination regulations do fall under the Equal Treatment Framework, he did not think that the Directive prevents EU states from introducing a mandatory retirement age. Whilst this is not a binding decision, around 80% of past ECJ decisions have gone the same way as the Advocate-General, so it is quite a telling opinion. The ECJ is due to make its decision this year, and there are around 260 cases in the UK that are waiting for the outcome before they can be decided.
What should employers do for the time being?
At the moment, employers can still dismiss employees after the age of 65 by reason of retirement, as long as they follow the statutory procedure and as long as they are a private sector company. The rules relating to public sector employers are different and they cannot necessarily automatically dismiss by reason of redundancy after the age of 65. This is because of the principle of ‘direct effect’ which means that EU rulings apply directly to the public sector, whereas the private sector continues to rely on UK regulations until they are changed or removed. So if the ECJ finds the UK regulations are incompatible with the Directive, public sector employers will have to immediately change their procedures. Employers need to keep their eye out for the ruling as this may affect their policies and procedures if it means a change to the UK regulations.
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