Out-Law News 3 min. read

ECJ expert says mandating retirement at age 65 can be lawful


An advisor to the European Court of Justice (ECJ) has said that the UK should be allowed to permit employers to force workers into retirement as long as the move had an 'objectively justified' policy aim.

Advert: free OUT-LAW Breakfast Seminars - 1. Making your contract work: pitfalls and best practices; 2. Transferring data: the information security issuesAdvocate General Jan Marzak said the UK will not have broken EU law if it could justify allowing employers to insist on compulsory retirement as long as it had a legitimate policy aim.

Advocates General produce opinions before the ECJ considers a case. The opinion is not binding but is followed in about 80% of cases.

Age Concern has asked the ECJ to rule on whether 2006's Employment Equality (Age) Regulations failed to properly implement the European Directive on Equal Treatment, on which it is based.

That Directive bans discrimination on grounds of age, yet the UK Regulations allow employers to force workers to retire at 65. Age Concern said that allowing employers to force retirement at or after 65 breaches the equality principles established by the Directive.

Advocate General Marzak confirmed that the issue is covered by the Directive, but said that it allows for laws such as the UK's as long as they are justified. The Court was not asked to rule on whether they were justified in this case. The UK High Court will rule on that.

"Not having the Advocate General’s support for our case is disappointing for us and for the millions of older workers in the UK," said Gordon Lishman, director general of Age Concern.

"Millions of older workers in the EU will be fuming that the Advocate General thinks ageism counts for less than other forms of discrimination," said Lishman. "This is not a minority issue. In the UK ageism is already the most commonly experienced form of prejudice and more than a million people are already working past state pension age."

Under the UK's Regulations an employee can work past 65 if the employer agrees, but the employer has the right to force retirement at 65 or at its official retirement age, if that is older than 65, without redundancy pay or compensation.

Around 260 employment tribunal cases are on hold awaiting the outcome of the legal deliberations.

The UK Government has argued that its Regulations ban age discrimination in all other fields, but that retirement policy was a matter that national governments should be allowed to decide on.

The ECJ last year ruled in a Spanish case and overturned an Advocate General's opinion. The ECJ said that, contrary to an Advocate General's view, retirement age policy did fall under the scope of the Equal Treatment Directive.

That meant that the Spanish Government had to objectively justify its compulsory retirement policy. The ECJ found that the government had been successful in that aim and backed its compulsory retirement policy, whose aim was to improve access to jobs for young entrants into the employment market.

Arzak agreed that the Directive covers retirement rules.

"Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation is applicable to national rules, such as the Employment Equality (Age) Regulations 2006, SI 1031/2006, which permit employers to dismiss employees aged 65 and over by reason of retirement," said his opinion.

"A rule such as that at issue in the main proceedings, which permits employers to dismiss employees aged 65 or over if the reason for dismissal is retirement, can in principle be justified … if that rule is objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market and it is not apparent that the means put in place to achieve that aim of public interest are inappropriate and unnecessary for the purpose," said the opinion.

The ECJ has not been asked to rule on whether the UK's aim in passing legislation allowing compulsory retirement is a legitimate aim under the Directive. It was only asked if the Directive actually applied to the issue at all. The Advocate General said that it did.

The reference to the ECJ was made by the High Court, which will ultimately decide the case in the light of the ECJ's opinion on the matter, which is expected in the coming months.

Jon Fisher, an employment lawyer at Pinsent Masons, the law firm behind OUT-LAW.COM, said employers need to decide now whether or not to rely on the Regulations.

"There is a real legal risk here for employers that they need to be aware about now rather than waiting for this decision to come through," he said. "The difficulty is that [a decision] is going to have retrospective effect almost certainly in the public sector and possibly in the private sector as well."

"Employers need to decide now: are we going to take the gamble now and rely on the Regulations and hope that [the ruling] goes in favour of employers, or are we going to adjust out employers now, assume [the ruling] will go against employers and manage the risk in that way?" said Fisher.

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