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The default retirement age of 65 remains lawful...for now!

29 September 2009

The High Court has just handed down its decision in the high profile Heyday case ruling that, subject to the employer following a retirement process, it is legal for employers to require employees to retire from the age of 65.

The case was referred back to the High Court after the European Court of Justice ruled that a national default retirement age (“DRA”) could be legal as long as it could be justified.  The Government then had to prove to the Court that the mandatory retirement age was justified by a legitimate social policy objective. 

Whilst the judgment appears to deal a blow to those willing and able to work over the age of 65, the right to request to work beyond 65 already exists for employees, and the Government has announced that it will review the DRA of 65 in 2010.  The review was originally scheduled for 2011, but economic and demographic pressures caused the Government to bring it forward.

Although the DRA remains lawful for now, the Court found the arguments against it compelling, and made numerous comments which indicate that it may not survive for much longer.  It appears likely that the DRA will be abolished, or raised, in 2010.  In the unlikely event that neither of these happen, it is difficult to see how the Government can sustain the justification of a mandatory retirement age of 65 in the long term anyhow when the state pension age is set to increase from 65 to 68 between 2024 and 2046.

If the DRA is abolished, employers will risk unfair dismissal and age discrimination claims for forcing workers to retire.  In the absence of a DRA employers may find workforce planning difficult and job-blocking by the more mature members of staff may become a problem.  Employers may also find themselves tempted to withdraw or reduce benefits to staff across the workplace for fear of the additional cost of providing them to the over-65s.  

Employers are likely to await the outcome of the review in 2010 with nervousness.  It would appear that the days of following correct procedure to dismiss an employee on that person’s 65th birthday are numbered. 

For more information contact Melissa Edmond, Solicitor specialising in Employment law.
 

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