23/09/2008

Employment e-Brief – Compulsory Retirement Age Challenge – News from the ECJ

The Advocate-General to the European Court of Justice has handed down his opinion in the case known as the “Heyday” appeal. This is a challenge by Heyday (part of Age Concern) against the Government’s decision to allow employers to dismiss employees aged 65 or over, fairly on the grounds of retirement. As the law stands, employers do not have to have any other fair reason to dismiss employees, provided that they are aged 65 or over. The employer simply has to provide an extended notice provision of at least six months and allow the employee a meeting at which to challenge his retirement.

Heyday argued that this was incompatible with the EU Equal Treatment Framework Directive.

The Advocate-General however has recommended to the Court that they find that the ability to dismiss employees aged 65 or over on the grounds of retirement is compatible with the Equal Treatment Directive, provided that this is objectively justified within the context of national law. What this means is that it would be an issue that should be determined by the UK courts.

Whilst the European Court of Justice does not have to follow the Advocate-General’s view, it is usually very influential and they rarely reject the Advocate-General’s opinion.

If the appeal were to succeed then it would mean that employers could not retire employees fairly and instead they would have to dismiss them for a different fair reason, such as by following a performance management or a misconduct route.

As matters stand employers can continue to fairly dismiss employees when they reach the age of 65 on the grounds of retirement. It is unlikely that the law will change to provide employees with the ability to challenge their employer’s decision provided that the employee is over 65 and given at least 6 months notice of retirement.

If you would like further details on how to fairly retire employees and/or a management-facing retirement procedure, please contact one of the Gordons employment team.