Waiting for ages

The High Court's recent decision in the case of R (on the application of Age UK) v Secretary of State for Business, Innovation & Skills means that employers can continue to retire employees at the age of 65, provided a correct statutory procedure is followed. (This has been known as the 'Heyday' case – Heyday was part of Age UK, formerly Age Concern.) Employers have welcomed the decision, but should be aware that the situation may change in the near future. The Employment Equality (Age) Regulations 2006 ('the Regulations') came into force on 1 October 2006. They were intended by the government to transpose into UK law those parts of the European Equal Treatment Framework Directive ('the Directive') dealing with age discrimination. Under the Regulations, it is not unlawful age discrimination to retire an employee because they have reached a normal retirement age of 65 or over – or, if there is no normal retirement age, to retire them at 65, provided the correct statutory procedure is followed. Employers can only lawfully retire employees at an earlier age if this can be justified. In July 2006, the Heyday Group submitted a claim for a judicial review to challenge, among others, the default retirement age (DRA) of 65 set out in the Regulations. Heyday argued that the DRA was not permitted by the Directive. The High Court referred a number of preliminary questions to the European Court of Justice (ECJ) and in March 2009, the ECJ ruled that the DRA was covered by EU age discrimination law but could, theoretically, be justified by legitimate social policy objectives. It therefore sent the case back to the High Court to decide whether the DRA was, in fact, justified. The High Court has now ruled that the DRA was justified when it was introduced on the basis that the UK government had legitimate social policy aims of protecting the confidence and integrity of the labour market. It noted that the DRA "is a measure designed to give certainty and corresponding focus for planning purposes for employers and employees alike". However, the High Court found there were compelling reasons why a DRA of higher than 65 should have been adopted by the government – for example, to deal with the generally recognised problems for the social security system created by greater longevity. The deciding factor for the court was, however, the fact that a review of the DRA is to be carried out by the government in 2010. This was originally planned for 2011, but just before the High Court hearing, the government announced that it would move the DRA review forward to early 2010. The court indicated that its decision might have been different if, for example, the Regulations been adopted for the first time in 2009 rather than 2006, or given the change in economic circumstances since then, had the government not moved forward its review. As a consequence of the High Court's decision, any cases before the Employment Tribunal that have been stayed pending this judgment will have the stay lifted. It is unclear whether the Employment Tribunals will now strike out relevant claims of their own volition or whether this will need to be done on the application of the parties. So, what will the future hold for the DRA? It is highly likely that the DRA of 65 will not survive the government's review next year – indeed, Age UK has already said it will not appeal against the High Court's decision. It is unclear, however, whether the DRA will be raised or whether the government will get rid of it completely. Whatever the result, it is likely that employers will need to change their policies regarding retirement. For the time being, therefore, and until the government's review next year, employers can continue to rely on the DRA of 65 to retire employees. Louise Burn works in the employment law team at Pinsent Masons: www.pinsentmasons.com