In our Pension update for October 2008, we reported that the Advocate-General (AG) had delivered his opinion in Age Concern England v Secretary of State for Business, Enterprise and Regulatory Reform (C-388/07) (the Heyday case). In his opinion, the AG stated that regulation 30 of the Employment Equality Age Regulations 2006, which permits UK employers to dismiss employees aged 65 or over for retirement, could be justified in principle.

In its subsequent judgment in the Heyday case, the ECJ held that member states are not required in national legislation to specify the differences in treatment that may amount to justification and that the test of justification is effectively the same for direct and indirect discrimination. National legislation may provide that “difference of treatment on grounds of age”, such as forced retirement at age 65 which is the issue here, is justified if it is a proportionate means to achieve a legitimate aim, such as a social policy objective relating to employment policy, the labour market or vocational training.

The case will now return to the High Court for a decision on whether the default retirement age is justified in the UK.

Comment: this judgment appears initially to be a victory for the Government, although the case must still be made that a mandatory retirement age is justified by a legitimate social policy objective. However, it is difficult to see how the Government will be able to sustain the justification of a mandatory retirement age of 65 when there are plans to increase the state pension age to 66 from 2024 (and subsequently, on a gradual basis, to 68). The level of the compulsory retirement age was due for Government review in 2011 but this is now to be brought forward a year.

The judgment resulted in a mixed reaction from other commentators. The TUC views it as a blow to those who are able and willing to work past 65, while the British Chamber of Commerce feels it is the correct decision since the right to request a postponement to retirement already exists.