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Author Julian Outen
Issue April 08
Pub Suf Bus
The Employment Equality (Age) Regulations 2006 have been in force for coming up for eighteen months now and we are beginning to see the first test cases concerning their application, as these work their way through the courts, writes Julian Outen of Ashton KCJ.
UNDER the new regime, employers are able to set a mandatory retirement age of 65 and it is lawful to dismiss an employee who has reached this age or above, on grounds of retirement, provided the prescribed statutory retirement procedure has been followed. Any compulsory retirement age below the age of 65 is discriminatory unless it can be objectively justified by the employer.
It was seen by some as rather ironic that an employer could lawfully dismiss an employee age 65 or over simply by forcing them to retire, given the Regulations were designed to outlaw discrimination on grounds of age. Although the Regs had given this class of employee unfair dismissal rights, they were afforded little else by way of job security. This has, unsurprisingly, therefore become the subject matter of a legal challenge to the European Court of Justice (ECJ) in what is commonly referred to as the Heyday case.
A similar challenge has already found its way to the ECJ under like provisions in Spanish law, and in which it was confirmed that Member States are not prevented from imposing a mandatory retirement age. The Heyday challenge, whilst not identical to this, may therefore be heading for a similar result, in which case, employers may breath a sigh of relief. It remains possible, however, that the ECJ will outlaw the current ability to set the mandatory retirement age, in which case employers would need to justify any dismissal on grounds of retirement at age 65 or above, otherwise, face a claim of unfair dismissal and discrimination.
In a business partnership, unlike an employment relationship, the retirement of a Partner at 65 for example does require justification. A couple of cases involving Partners in law firms have already touched on these issues and useful guidance has been given as to the facts that a Tribunal might need to take into account when assessing whether the retirement dismissal can be objectively justified. These guidelines will prove useful to employers who have retirement ages below the age of 65, and will prove invaluable if justification is required for employees age 65 and above, if there is an adverse decision in the Heyday case.
Some individual employees age 65 or over are already challenging their retirement dismissal as unfair and such cases are being stayed in the Employment Tribunals pending the outcome of Heyday. In the meantime, unfortunately, there is a degree of uncertainty and potential exposure in relation to the retirement of individuals in this category, which is far from satisfactory for employers, particularly given that a decision in the Heyday case is not expected until at least the end of the year.
Julian Outen, Partner
Employment Department
Tel: 01473 232425
Email: julian.outen@ashtonkcj.co.uk
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