Employment Alert No 165: Heyday: Default Retirement Age of 65 if Lawful
September 29, 2009
Background
Under UK law an employer can dismiss an employee on his/her 65th birthday (even if the employee does not want to retire), provided it follows the correct procedure for carrying out a retirement dismissal.
Employees can request to continue working beyond their 65th birthday, but the employer can refuse the request and the law does not require them to give any reason for that decision.
Heyday, a division of Age Concern, believes that it discriminates against older workers for there to be a national default retirement age (“DRA”) of 65. Their arguments were heard by the ECJ earlier this year. The ECJ found the existence of the DRA to be potentially legitimate and sent the case back to the UK High Court.
The Decision
The High Court has now upheld the lawfulness of the DRA of 65.
However, it is key to note that the Court’s finding was that the introduction of the DRA had been an appropriate step in pursuance of legitimate social policy objectives when the law was introduced in 2006. The Judge was clear that in light of the aging population and the state of the economy, the position was now different.
The Government has scheduled a review of the DRA for 2010 and the Judge said that he did not believe that the DRA would be capable of justification after that review.
What this Means for Employers
Many employers will welcome the ruling. A string of compensation cases currently pending in Tribunals brought by people who did not want to retire at 65 are now likely to be dismissed.
However, this reprieve is likely to be short term and it seems almost certain that the DRA will be scrapped after the Government review in 2010. That would, of course, deprive employers of the ability to bring employment to an end when an employee reaches age 65 without further justification. But, until 2010 at least, the status quo is maintained.
