News

November 11, 2009

Case law: it’s still lawful to retire staff at 65… for now

Employers who retire their employees at 65 or over do not, for the time being, need to change their retirement policies, but the Government is due to review the law next year.

Earlier this year, the European Court of Justice (ECJ) ruled that UK legislation permitting employers to retire employees aged 65 or over as compulsory, could, in principle, be justified under European law. However, the ECJ said that this had to be reasonably justified (ie by state social policy, such as employment policy, the labour market or training, as opposed to one-off reasons from individual firms). The ECJ sent the matter back to the UK courts for them to determine whether the retirement age of 65 was in fact justified by British social policy.

The High Court in London, applying the ECJ ruling, has now decided that the rules introducing the default retirement age of 65 (the Employment Equality (Age) Regulations 2006) were appropriate at the time, and should not be overturned. However, the judge’s decision was influenced by the fact that, shortly before the hearing, the Government had announced its intention to move forward the review of the Regulations to 2010. The judge said that he could not see how 65 could remain as a default retirement age after the review.