Pressure group Heyday is taking the UK Government to the ECJ
over retirement laws introduced last year. The ECJ ruled last week
that Spanish rules on compulsory retirement were lawful, but while
that might seem like a blow for Heyday, the detail of the ruling
gives Heyday cause for hope, according to Catherine Barker of
Pinsent Masons, the law firm behind OUT-LAW.COM.
"I think the cases are quite different," she said. "The ECJ's
ruling in the Spanish case said that compulsory retirement ages did
come within the scope of the Equal Treatment Directive, and
Heyday's case is that the UK retirement laws are not compatible
with that Directive."
The ECJ backed the Spanish employer in the case of Felix
Palacios. He was forced to retire at 65 under the terms of his
employment contract, but objected and took a case against his
employer, arguing age discrimination. The Spanish court referred
the case to the ECJ.
When cases are before the ECJ, an Advocate General will issue an
opinion that proposes a legal solution. The Advocates General are
members of the ECJ but they act independently of its judges. Their
opinions are not binding on the judges, but they are highly
influential and usually followed.
When an Advocate General gave his opinion earlier this year in
Palacios's case, he said that the Directive's general principle of
non-discrimination did not extend to national laws that [allow /
set] compulsory retirement ages. The full court, unusually, did not
follow this opinion when it gave its judgment, meaning that
national laws relating to compulsory retirement ages can be
examined and will need to be objectively justified.
The Spanish Government saw the case as having wider significance
for its national laws. It became an interested party and made
submissions to the ECJ, as did the Irish, Dutch and UK Governments.
The ECJ noted that the policy behind the Spanish Government
permitting compulsory retirement ages to be contained in employment
contracts was to promote better access to employment, thereby
promoting full employment, by better distribution of work between
the generations. The ECJ agreed that this was a legitimate aim.
The ECJ also found that the means of the Spanish Government
achieving that policy objective did not go further than is
appropriate or necessary. They noted in particular that in Spain
compulsory retirement can only take place if the person had also
qualified for a state pension. The ECJ took note that Spanish
legislation allowed managers and union representatives to take
account of local labour markets when deciding at what age to fix
retirement in local employment contracts.
Though employers may be relieved that the compulsory retirement
laws in Spain have been backed, Barker said that this does not mean
that the ECJ will back the UK's retirement laws, contained in the
Age Discrimination Regulations.
"Because the Advocate General's opinion has not been followed by
the full court, the UK provisions are definitely now open to
scrutiny and it will be for the UK Government to show that the UK
retirement provisions are appropriate, necessary and go no further
than they need to to achieve a national aim," said Barker.
The UK Age Regulations, introduced in 2006 to implement the
age-related parts of the Directive, create a default retirement age
of 65 for those companies which do not specify a retirement age.
Heyday is objecting to that, as it says that this can effectively
force employees out of the job market at that age, even if they
wish to carry on working. It says that this is age discrimination.
Heyday also objects to the fact that UK companies can in some cases
still specify a retirement age of under 65.
Barker said that elements of the ECJ ruling backed Heyday's
case. "Arguably the UK Government does not have the same social
policy aims in having a default retirement age of 65 and therefore
the justification defence that the Spanish Government could make
out."
Age Concern, the charity behind Heyday, said that it would
continue with its case. "There are significant distinctions between
the Heyday case and the case of Felix Palacios," said Gordon
Lishman, director general at Age Concern. "The legal advice we are
hearing is that Heyday should forge ahead with its case
undeterred."
"We remain hopeful that the European Court of Justice will
agree with Heyday's interpretation of the EU Directive in finding
parts of the regulations relating to mandatory retirement age
unlawful. Forcing an ageing workforce to retire on grounds of age
alone is unlawful, discriminatory and absurd," he said.
The legal uncertainty has created some confusion for companies
and employment tribunals alike. Barker said that companies who
spent significant time putting together policies that complied with
the new law last year have been in limbo since the lodging of the
Heyday case. "It was lodged in December 2006 and might not be ruled
on by the ECJ till 2009," she said. "People who have cases now
before employment tribunals are asking for their cases to be stayed
until that ruling. There would appear to be inconsistency at
tribunal level as to whether cases are being put on hold or struck
out."
"I think if you have a tribunal case at the moment about
retirement dismissals and the employee is alleging direct age
discrimination, there may now be stronger grounds to argue a halt
of proceedings is appropriate than there were when the Advocate
General's opinion came out," said Barker. "If you are the employer,
of course, you will seek to argue that the employee's prospects of
success remain too remote, given that the ECJ did say in the
Spanish case that it is for member states to find the right balance
between the competing interests involved."
"For the time being, employers and employees remain in limbo if
faced with unfair retirement dismissal claims," said Barker.
