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Default retirement age may be permissible

Posted on 12th March 2009
Case law

The ECJ has decided on the ongoing case commonly referred to as Heyday; the default retirement age of 65 may be permissible under European law. The High Court must now decide if the default retirement age is justified.

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the default retirement age of 65 may be justifiable

'Heyday'

Background

Since the introduction of the Employment Equality (Age) Regulations 2006, Heyday have been challenging the legality of the default retirement age of 65. The English courts referred the matter to the ECJ to consider whether the Regulations were consistent with European law.

A default retirement age is discriminatory. Under European law and the Regulations age discrimination is permissible if the discrimination is justified. To be justified under European law the default retirement age must exist to achieve a legitimate aim and also be an appropriate and necessary way of achieving that aim.

The decision

The decision of the ECJ is the default retirement age of 65 may be justifiable. Whether it is in fact justifiable is a question that will need to be answered by the High Court.

In practice

This case and the question of whether employers can safely rely upon the default retirement age will rumble on for some time to come. When the High Court decision is known we will include a summary of the decision and its impact in practice as soon as possible. In the meantime, all existing claims contending discrimination following retirement at age 65 are likely to remain stayed.

As for pending retirement what should employers do? Worst case scenario is that the High Court decides that the default retirement age is not justified and 'quashes' (or renders void) the default retirement age provisions within the Regulations. This will leave employers relying on their own arguments of justification for retiring employees at age 65. Any employer wishing to continue retiring at age 65 should consider their own position on justification and ensure that their arguments are in order. It is important to recognise that the Regulations do not follow the European wording relating to justification. Under the Regulations, for treatment to be justified, it must be a 'proportionate means of achieving a legitimate aim'. Alternatives are not to retire at all or to enter into compromise agreements with retiring employees. 

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