Commission reiterates call for retirement age to be abolished following high court ruling

The Commission has renewed its call on the Government to scrap the Default Retirement Age (DRA), following a high court ruling today.

Although the judge in the case, in which the Commission intervened, ruled that the DRA was lawful when first introduced he also stated that there is now a ‘compelling’ case for setting the age higher than 65.

The Commission is asking the Government abolish the DRA using the Equality Bill, which is soon to be debated in the House of Lords, rather than wait until a review of the policy next year. 

Mr Justice Blake recognised the ‘very substantial weight’ of the arguments put forward by the Commission and Age UK to stop people being forced out of work at 65. 

In explaining his ruling he said he took into account the Government’s move to bring forward a review of DRA from 2011 to 2010. This review will consider whether a Default Retirement Age is still “appropriate and necessary”.

He also observed that a DRA would be unlikely to be lawful if it was introduced in 2009 because of the state of the economy. However, his decision to allow a DRA of 65 was based on the circumstances and evidence available three years ago when it was introduced.

Employers do not need to have a normal retirement age policy as the Employment Equality (Age) Regulations do not make it compulsory. Employees have the right to ask to carry on working beyond the age of 65 even if their employer has a normal retirement age in place.

Hundreds of retirement-related Employment Tribunal cases, which have been on hold awaiting the outcome of this legal challenge, can now move forward. The Employment Tribunal will have to take into account the Judge's observations on the legality of a DRA of 65 in 2009 when considering these cases

John Wadham, Legal Group Director for the Commission, said:

'The number of older employees is increasing and the law should support those who wish to carry on working and making an economic contribution. Many employers have said they think that having a mandatory retirement age is more trouble than it’s worth.

'The judge has sent out a strong signal that it is only a matter of time before the default retirement age of 65 is removed, and we will consider what action we could take next. The Government’s promised review has already been brought forward from 2011 to 2010. It could act sooner to strike the DRA out of the rule books using the Equality Bill.'

There are 1.4 million people working past state pension age (65 for men, 60 for women), according to the most recent Labour Market figures from the Office of National Statistics. This is up from 1.2 million people the year before.

The number of people in retirement has been falling steadily since October last year, from 608,000 to 567,000, which could mean 40,000 people have gone back to work to top up their pensions.

Research by The Age Employment Network (TAEN) found that one in three employers using a mandatory retirement age thought that it can lead to a loss of valuable knowledge and talent.

One in four organisations without a normal retirement age policy said it was a 'positive step' and that 'it helped maintain valuable skills and their organisation’s customer-facing image and reputation'.

Ends

For more information contact the Equality and Human Rights Commission Media Office on 02031170255, out of hours 07767272818.

Notes to Editors

The ruling of the case can be found here.

The law

The Employment Equality (Age) Regulations 2006 (the Regulations) came into force on 1 October 2006.   The Regulations implemented the November 2000 European Directive outlawing age discrimination in employment and vocational training.  However, the Government restricted the protection available to people over the age of 65 by creating a new “default retirement age” of 65 for both men and women.  This permits employers to set a “mandatory retirement age” or “normal retirement age policy” at or above the age of 65.  Employers will only be able to justify forced retirement under the age of 65 in exceptional circumstances. 

In practice it means an employer can compel its employees to retire at or after 65 and can refuse to recruit anyone over the age of 65.  It is lawful for an employer to force employees age 65 or over to retire as long as they follow the correct procedure, which includes giving the employee between six and twelve months notice.  Employees have the right to request to continue working beyond the date when the employer wants them to retire, but the employer can refuse the request and the law does not require them to give any reason for that decision.  

The legal challenge

The charity Age Concern and Help the Aged sought a judicial review of the Employment Equality (Age) Regulations 2006 just after the Regulations were published.  The case against the UK Government argues that the Age Regulations had improperly implemented the EU’s 2000 Equal Treatment Directive by including a national default retirement age applicable to all UK workers.  The judicial review is also challenging the linked exception relating to the recruitment of employees near or over age 65 and the scope for justification of direct discrimination on grounds of age. 

The High Court needed clarification on how the EU Directive should be interpreted and so made an order referring five questions to the European Court of Justice.  The wording of the questions was agreed between the DTI (later BERR and now BIS) and the charity and were endorsed by the High Court.  The European Court of Justice published its judgment in March 2009, in which it made it clear that the UK government has to meet a high standard of proof in demonstrating that its default retirement age is justifiable on grounds of social or employment policy. 

The case returned to the High Court and a hearing was held on 16-17 & 20 July 2009.   The Commission used its legal powers to intervene in the case, so that it could support the charity’s claim with additional evidence and legal arguments.  The charity and the Commission presented evidence and legal arguments on one side, and the Government on the other. 

The ruling of the case is published today (25 September 2009) and can be found on the Commission’s website in the legal updates section.

Government review of Default Retirement Age

Shortly before the hearing of the case in July, the Government said it was bringing forward by one year its review of the default retirement age, from 2011 as originally planned, to 2010. Full details of this can be found in the Government’s strategy paper, Building a society for all ages, published in July 2009.

The judge commented that his decision might have been different if the review had not been imminent:

‘If Regulation 30 had been adopted for the first time in 2009, or there had been no indication of an imminent review, I would have concluded for all the above reasons that the selection of age 65 would not have been proportionate’.

He then went on to say:

‘I cannot presently see how 65 could remain as a DRA after the review.’

Equality and Human Rights Commission

The Commission is a statutory body established under the Equality Act 2006, which took over the responsibilities of Commission for Racial Equality, Disability Rights Commission and Equal Opportunities Commission.  It is the independent advocate for equality and human rights in Britain.  It aims to reduce inequality, eliminate discrimination, strengthen good relations between people, and promote and protect human rights.  The Commission enforces equality legislation on age, disability, gender, race, religion or belief, sexual orientation or transgender status, and encourage compliance with the Human Rights Act.  It also gives advice and guidance to businesses, the voluntary and public sectors, and to individuals.