EUROPE/UK - The European Court of Justice (ECJ) has argued it is "ultimately" for the UK High Court to decide whether the default retirement age of 65 breaches age discrimination legislation.

In its ECJ judgement, the court aimed to clarify the "conditions under which member states may authorise the dismissal of workers by reason of retirement as Heyday, which is part of UK charity Age Concern, contested the UK government was breaking European laws by forcing people to retire at 65.

On the face of it, it appears the ECJ has backed the UK's argument that it is not in contrvention of laws as the notice stated: "National legislation may provide, in a general manner, that this kind of difference of treatment on grounds of age is justified if it is a proportionate means to achieve a legitimate social policy objective related to employment policy, the labour market or vocational training".

However, there is still no definite decision as the ECJ also suggests it may be in breach unless it can prove this decision is not taken purely for business reasons as the ruling said these "legitimate aims" are different from "purely individual reasons particular to the employer's situation, such as cost reduction or improving competitiveness", although it admitted a national rule may recognise a "certain degree of flexibility for employers".

Age Concern had earlier launched a legal challenge to the High Court on the basis that the default retirement age of 65, in lieu of an employers' normal retirement age, was contrary to the requirement of Article 6 of EU Directive 2000/78, but the court then referred the matter to the ECJ for a preliminary ruling.

The ECJ judgement, which follows an earlier opinion from the advocate general in September 2008, also confirmed that "ultimately" it is for the UK High Court to "determine whether and to what extent a provision which allows employers to dismiss workers who have reached retirement age is justified by ‘legitimate' aims within the meaning of Article 6(1) of Directive 2000/78". (See earlier IPE article: ECJ tackles age discrimination in pensions)

It added the High Court must now "ascertain, first, whether the UK legislation reflects such a legitimate aim and, second, whether the means chosen were appropriate and necessary to achieve it".

Following the judgement, Age Concern and Help the Aged claimed the ruling means the government "has to overcome a high hurdle to justify forced retirement", and instead called for the default age to be scrapped immediately rather than return to the courts.

Gordon Lishman‚ director general of Age Concern‚ said: "We still have a very strong chance of winning in the British Courts. The ECJ has said the government must prove to a high standard why forced retirement ages are needed‚ and those reasons must be based on social or labour market needs‚ not the interests of employers."

"The government's position is increasingly contradictory. Only last week ministers criticised the ‘grey ceiling', which stops people working beyond the age of 65. Yet‚ they continue to consign millions of willing and able older workers to the scrapheap by maintaining the very barrier which prevents them from extending their working lives.  It is time for ministers to find the courage of their convictions and abolish the default retirement age without further delay," he added.

Andrew Lockley‚ head of public law at Irwin Mitchell the legal firm acting on behalf of Age Concern, said: "The law needed clarification‚ as neither employers nor older employees knew where they stood.  The ECJ has made it clear that an employer's circumstances cannot be used to justify discrimination on the grounds of age."

He added: "The decision of the ECJ will guide the High Court when it comes to consider whether the UK Government can justify the default retirement age of 65. There are also a number of claims of age discrimination by workers who have been retired against their will‚ which are on hold until the ECJ has given judgment."

However the Confederation of British Industry (CBI) claimed the ruling was a "victory for common sense" as it is not possible for people to work past the age of 65 in all occupations.

John Cridland, deputy director-general at the CBI, said: "The current system where there is a default retirement age of 65, but people can request to carry on beyond this age, works well. It provides flexibility, and our research shows that 81% of requests to work beyond 65 are accepted. Companies don't want to lose good people, whatever their age."

"The alternatives to a default retirement age simply wouldn't work. People age, and the law has to allow for this while enabling employers and employees to reach a practical outcome. Companies with small numbers of staff have particular problems adapting jobs to the needs of older workers," he added.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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