ECJ judgment on compulsory retirement in Heyday challenge

The ECJ has given its eagerly awaited judgment in Incorporated Trustees of the National Council on Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform, or the Heyday Challenge as it is more commonly known. The Court found that the provisions of the Employment Equality (Age) Regulations 2006 SI 2006/1031 which allow compulsory retirement of workers at age 65 fall within the scope of the Equal Treatment Framework Directive (No.2000/78). As a result the High Court must now decide whether these provisions are justified by a legitimate aim.

The National Council on Ageing, which operates under the names Heyday and Age Concern, sought judicial review of the Employment Equality (Age) Regulations 2006. Heyday argued, among other things, that by including provisions in the Regulations allowing for the compulsory retirement of employees at 65 (Reg 30), the Government failed to adequately implement the Equal Treatment Framework Directive (No.2000/78). It also argued that the general defence of justification applicable to direct and indirect age discrimination, contained in Reg 3, did not properly implement Article 6(1) of the Directive, because it did not include a specific list, similar to that found in Article 6(1) of the aims in pursuit of which discrimination may be justified. The Government agreed before the High Court that the best forum to settle the issues would be the European Court of Justice. A practice direction was then issued by the President of the Employment Tribunals staying all claims relating to compulsory retirement until the ECJ decision.

The ECJ, in a decision which essentially mirrors the Advocate General’s opinion that was issued in September 2008, has found that provisions, such as Reg 30, which allow the compulsory retirement of employees over a certain age fall within the scope of the Directive. Since the retirement age directly discriminates on the ground of age, Article 6(1) requires that it must be ‘justified by legitimate social policy objectives, such as those related to employment policy, the labour market or vocational training’. However, Article 6(1) does not, as Age Concern contended, require the defence of justification in Reg 3 to include a precise list of the aims justifying derogation from the principle of non-discrimination.

What the ECJ did not decide was whether the provisions allowing for compulsory retirement are, in fact, justified. Instead, it will be for the High Court, taking into account the discretion Member States have in areas of social policy, to determine whether the compulsory retirement of workers at 65 is justified by a legitimate aim within the meaning of Article 6(1) of the Directive, and whether the means used to achieve that aim were appropriate and necessary. The Government will have the burden of proving to a high standard of proof the legitimacy of the aim relied on as justification.

Accordingly employers are recommednded to seek legal advise when dealing with this complicated area of employment law.

For more information contact our Employment Department