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Default Retirement Age is Lawful
Issue 33 - December 2009
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The default retirement age of 65 is not unlawful but should be scrapped, a judge has ruled in the long-running Heyday legal case...
Background
The Employment Equality (Age) Regulations 2006 were introduced in October 2006. Following the Employment Equality Regulations (Religion or Belief, Sexual Orientation and Sex Discrimination) introduced in 2003 and 2005, the Age Regulations aimed to protect employees against discrimination on grounds of age. The Regulations also introduced a National Default Retirement Age (DRA) of 65 years of age and a process to be followed to enable employees to request continued working beyond the DRA.
While the Regulations do provide a clear planning framework for employees approaching retirement, for many employees and their representatives the inclusion of the DRA has remained a contentious issue since the Regulations were announced in 2004.
The widely published Heyday case refers to the legal challenge by the Heyday Members Association, a division of Age Concern. According to Heyday, 80% of people in their 50s and 60s believe there should be no mandatory retirement age.
In their legal challenge, Heyday argued that, by introducing a National DRA, the Age Regulations discriminated against older people and that the Government had failed to implement the EU’s 2000 Equal Treatment Directive correctly. Following initial legal challenges in the UK, the case was referred to the European Court of Justice (ECJ) in 2007. In March 2009 the ECJ then referred the case back to the High Court and the hearing took place in July 2009. On 25th September 2009, a judgement was announced.
The Judgement
Following a review of the UK’s implementation of the EU Directive, it was concluded that the Default Retirement Age was lawful when it was introduced. However it was stated that this would not have been the case if the Regulations had been implemented in the current economic climate. In addition, a key factor of the judgement was the government’s plans to bring forward their review of the DRA from 2011 to 2010.
On announcing the judgement, Mr Justice Blake stated that there was now a ‘compelling case’ to increase the DRA, and added that he could not presently see how 65 could remain as a default retirement age after the review. This, coupled with the changing economic climate and demographics of the population, is likely to leave the door wide open to change.
So what happens next?
The judgement that the default retirement is legal will be welcomed by many employers, who will now need to ensure they continue to follow the retirement process set out by the Regulations.
However, while the judgement confirms that the current Regulations are lawful, the government has committed to a review of the default retirement age in early 2010. In addition, The Equality and Human Rights Commission will ask the government to use the Equality Bill (the proposed consolidation of all the discrimination law which is to be debated in the House of Lords) to abolish the DRA altogether. Amongst some employers, abolishing the DRA is already common practice and this has been actively encouraged by the Employers Forum on Age (EFA). Add to this the growing number of organisations that have been campaigning for the DRA to be abolished and it seems that changes in legislation are likely following the government’s review in 2010. At the very least it seems likely that the DRA will be increased, and potentially abolished altogether.
Following a Fair Retirement Process
The Employment Equality (Age) Regulations introduced the National Default Retirement Age (DRA) of 65 and in accordance with the Regulations, employers must follow a certain process prior to retiring an employee:
- Provide the employee with 6-12 months written notification of the employee’s intended date of retirement.
- If the employee wishes to request continued working, they should respond to the employer 3-6 months in advance of the retirement date. The request should be in writing and should state that the employee wishes to continue working indefinitely, for a certain period of time or until a specific date.
- If the employee has requested to continue working, the employer should arrange to meet with the employee ‘within a reasonable period’ of receiving the request. The employer is however under no obligation to arrange a meeting if both parties agree to the extension or if it is not reasonably practicable to do so within a reasonable period; such as where the employee’s sickness prevents the meeting going ahead.
- As soon as reasonably practicable the employer should provide a written response to the employee’s request for continued working.
- If the employer declines the employee’s request and confirms the date that they intend to retire the employee, or if the employer offers working arrangements that differ to the request, the employee should be offered the right of appeal.
- If the employee continues working for a period of more than 6 months, the process should be repeated in advance of the new intended date of retirement.
Background
The Employment Equality (Age) Regulations 2006 were introduced in October 2006. Following the Employment Equality Regulations (Religion or Belief, Sexual Orientation and Sex Discrimination) introduced in 2003 and 2005, the Age Regulations aimed to protect employees against discrimination on grounds of age. The Regulations also introduced a National Default Retirement Age (DRA) of 65 years of age and a process to be followed to enable employees to request continued working beyond the DRA.
While the Regulations do provide a clear planning framework for employees approaching retirement, for many employees and their representatives the inclusion of the DRA has remained a contentious issue since the Regulations were announced in 2004.
In their legal challenge, Heyday argued that, by introducing a National DRA, the Age Regulations discriminated against older people and that the Government had failed to implement the EU’s 2000 Equal Treatment Directive correctly. Following initial legal challenges in the UK, the case was referred to the European Court of Justice (ECJ) in 2007. In March 2009 the ECJ then referred the case back to the High Court and the hearing took place in July 2009. On 25th September 2009, a judgement was announced.
The Judgement
Following a review of the UK’s implementation of the EU Directive, it was concluded that the Default Retirement Age was lawful when it was introduced. However it was stated that this would not have been the case if the Regulations had been implemented in the current economic climate. In addition, a key factor of the judgement was the government’s plans to bring forward their review of the DRA from 2011 to 2010.
On announcing the judgement, Mr Justice Blake stated that there was now a ‘compelling case’ to increase the DRA, and added that he could not presently see how 65 could remain as a default retirement age after the review. This, coupled with the changing economic climate and demographics of the population, is likely to leave the door wide open to change.
The judgement that the default retirement is legal will be welcomed by many employers, who will now need to ensure they continue to follow the retirement process set out by the Regulations.
However, while the judgement confirms that the current Regulations are lawful, the government has committed to a review of the default retirement age in early 2010. In addition, The Equality and Human Rights Commission will ask the government to use the Equality Bill (the proposed consolidation of all the discrimination law which is to be debated in the House of Lords) to abolish the DRA altogether. Amongst some employers, abolishing the DRA is already common practice and this has been actively encouraged by the Employers Forum on Age (EFA). Add to this the growing number of organisations that have been campaigning for the DRA to be abolished and it seems that changes in legislation are likely following the government’s review in 2010. At the very least it seems likely that the DRA will be increased, and potentially abolished altogether.
Following a Fair Retirement Process
The Employment Equality (Age) Regulations introduced the National Default Retirement Age (DRA) of 65 and in accordance with the Regulations, employers must follow a certain process prior to retiring an employee:
Further Information and Support
References: