The High Court has handed down its judgment in the long-running Heyday litigation, which challenged the legality of the minimum compulsory retirement age retirement age of 65, introduced by the Employment Equality (Age) Regulations 2006. The ECJ had confirmed earlier this year that the compulsory retirement provisions were capable of being justified. The High Court has now held that the retirement age of 65 was lawful when it was introduced in 2006 and so Heyday's challenge has failed.
Employers now have certainty that they can continue to require employees to retire at 65 (or any later contractual retirement age they have chosen), provided they follow the correct procedure. This involves the employer giving the employee a minimum of 6 months' notice of the intended retirement date and telling them that they have a right to request to work beyond their retirement date. If the employee makes such a request, the employer must consider the request, hold a meeting to discuss it and, if necessary, allow an appeal. The employer does not have to give reasons for any refusal and, if the correct procedure has been followed, the employer's decision cannot be challenged in the employment tribunals.
The hundreds of tribunal cases which had been put on hold pending this decision can now be progressed and should be dismissed to the extent that they rely on compulsory retirement being unlawful.
However, it seems likely that the reprieve for the retirement age of 65 will be short-lived. The Government committed earlier this year to bring forward the planned review of the retirement age from 2011 to 2010. The Judge took account of the planned review in reaching his decision. He noted that, whilst the retirement age was lawful in 2006 when it was introduced, if it was being adopted for the first time now, or if the Government had not announced the early review, his decision may have been different and he could see no reason for retaining 65 as the retirement age after the Government's review.
Impact on employers
- For the time being employers can, if they wish to do so, continue to compulsorily retire employees at age 65, provided they follow the statutory procedure. However, evidence from a CBI survey in this case is that 81% of employers have accepted requests by their employees to work beyond 65, suggesting that businesses often value the contribution made by older workers.
- Employers should, however, begin to consider how they will manage their workforce if the statutory retirement age is raised or abolished following the Government's review of the retirement age next year. Before any change is made to the retirement age, there will be consultation and it is likely that any change will be phased in.