Employment Team

• Alison Downie - Head of Employment Department
• Helen Wyatt - Partner
• Clare Gilroy-Scott - Senior Solicitor
• Katee Dias - Solicitor
• Belinda Copland - Consultant

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Retirement Age Update

NOVEMBER 2009

Some of you may already be familiar with what has become known as the Heyday case. However, for those of you that are not, Heyday was essentially a legal challenge to the lawfulness of the default retirement age of 65 which is set out in the Employment Equality (Age) Regulations 2006. It has been a long running piece of litigation but judgment was finally handed down in late September 2009. In a nutshell, it has been held that, for now, a default retirement age of 65 is permissible in the UK. However, it is thought that, had the Government not already announced a review of this default retirement age, the decision may have been different.

BACKGROUND

The Age Regulations, which came into force on 1 October 2006, provide that dismissal of an employee aged 65 or over shall not be unlawful where the reason for the dismissal is retirement. A prescribed retirement procedure is set out in the Regulations.
The Heyday Group challenged this default retirement age of 65, claiming it was not permissible under European law.

DECISION

The Court held that having a default retirement age was a legitimate and proportionate means of achieving the Government’s social policy aims. However, the Court did note that there were powerful reasons as to why an age of more than 65 should have been adopted.

Two days before the trial the Government had announced that it would be reviewing the default retirement age in early 2010 (originally, this review had been planned for 2011). Had this review not been announced, the Heyday Group may have won their challenge.

PRACTICAL CONSEQUENCES

For now, it is lawful to continue to dismiss an employee by reason of retirement from age 65 onwards. However, it should be remembered that a proper retirement process must be followed in order to achieve this.

FUTURE

We wait to see what the Government’s review will bring but it is strongly suspected that a default retirement age will be abolished or, at the very least, increased, perhaps to 68 or 70. Employers and employees will need to watch this space!

If you would like any further information about the issues raised in this article please contact Katee Dias or any other member of Goodman Derrick LLP's employment department on 0207 404 0606

This is a guide for general information and interest only and should not be relied upon as providing specific legal advice.