In July 2006 Heyday,an organisation created by and closely associated with Age Concern, issued a judicial review application in the High Court challenging the legality of the Employment Equality (Age) Regulations. The main thrust of the Heyday argument was that the Regulations do not properly implement the EU Equal Treatment Framework Directive (designed to combat discrimination on the grounds of religion or belief, sexual orientation and age) as the Regulations allow for a default retirement age of 65. As a result, Heyday claims that people beyond that age are denied the right to work.
The High Court has referred the matter to the European Court of Justice. The issues to be addressed include whether the Directive extends to national rules which permit the dismissal of employees aged 65 or over by reason of retirement and, if so, do the Regulations comply fully with the Directive.
Article 6 of the Directive states that differences in treatment are permitted if they are objectively and reasonably justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary. The High Court has asked if Article 6 requires Member States to define the kind of difference of treatment which may be justified in this way.
In light of the decision by the European Court of Justice in the Spanish case of Palacios de la Villa v Cortefiel Servicios SA in favour of compulsory retirement at 65 the prospects for the Heyday challenge do not initially look good. However, there are significant differences between the two cases. In Spain compulsory retirement is permitted but not enforced centrally as in the UK. Compulsory retirement is allowed by way of collective agreements between unions and employers’ organisations and thus can vary according to job type or industry sector. In addition, a worker in Spain will not be compulsory retired if they have not fulfilled all the criteria to obtain a state pension. There is no similar provision in the UK if a worker has not worked enough to gain entitlement to full state pension benefits.
What the UK Government can point to is the right of an employee to request to stay on in work beyond retirement age. This means that an assessment can be made on a case by case basis. However the retirement procedure introduced by the Regulations does not require an employer to state why an appeal against retirement is being denied, which does not assist the justification defence.
An EU Directive is regarded as having direct effect on employers in the public sector (which includes “emanations of the state”, such as utility companies). If the Regulations are found to be incompatible with the Directive then the Directive will take precedence. If the Heyday challenge wins public sector workers will be able to make retrospective claims for unfair dismissal at the age of 65.
Employees in the private sector do not have the same rights as public sector employees as the Directive does not have direct effect on private sector employees. However, the Regulations are secondary legislation and it is therefore open to an Employment Tribunal to look at them purposefully in light of the Directive. This means that if there is any doubt about what the Regulations say the Employment Tribunal will look at the purpose of the Directive and make a finding in light of that.
A judgment on the Heyday case is not expected until 2009. An employee who was reluctant to retire will want to make a claim for unfair dismissal and age discrimination as soon after dismissal as possible and seek to have the claim stayed (in light of Johns –v- Solent SD Limited) until a decision is made on Heyday.
Even if the European Court of Justice considers that the Regulations properly implement the Directive the issue of the default retirement age will not go away. The Government has said that in 2011 it will once again consider whether an increase to, or any default retirement age is necessary.