The European Court of Justice (ECJ) has confirmed that the compulsory retirement provisions of the Age Discrimination Regulations are capable of being justified.
Heyday challenged the right of an employer to compulsorily retire an employee at age 65 or over without the dismissal being treated as age discrimination. However, the ECJ has ruled that this is permissible under the Equal Treatment Directive if it can be justified by "legitimate social policy objectives such as those related to employment policy, the labour market or vocational training". This decision comes as no surprise as the ECJ reached the same conclusion in the recent Palacios case referred from the Spanish courts.
The ECJ did not itself decide whether the UK's default retirement age of 65 is justified and the case will now return to the High Court to determine that point. The UK government will have the burden of establishing that the compulsory retirement provisions are justified by a legitimate aim and that they were an appropriate and necessary way of achieving that aim.
Impact on employers
- Employers need take no action yet. The UK government still faces the challenge of justifying a default retirement age of 65.
- Retirement related employment tribunal claims that have been on hold pending this judgment are expected to remain on hold.
- Employees who are made to retire may still submit tribunal claims to preserve their position pending the High Court's judgment