29/09/2010

Employment e-Brief – Retirement Age Challenge Rejected

The High Court has ruled that employers are still able to force workers to retire at 65 following a challenge by charities Age Concern and Help the Aged.

Under the Employment Equality (Age) Regulation 2006, an employer can force employees to retire once they reach the age of 65 even if they are willing and able to continue working.  It also means that employers can refuse to recruit anyone over the age of 65 without giving reasons for doing so.  The ruling has confirmed this legislation.

The ruling is likely to be welcomed by employers who may use the mandatory retirement age to cut their workforce during the recession without having to make costly redundancy payments.  It is also thought that employers will avoid expensive tribunal claims because the ruling has clarified the position on retirement age.

The ruling has angered charities Age Concern and Help the Aged who claim that thousands of “dedicated and experienced employees” are regularly being “arbitrarily sacked” purely on the grounds of their age.  The charities have also said that the ruling is a blow for older people who need to work longer to secure a decent retirement in the face of a recession where many have seen the value of their pensions and savings fall rapidly.

Mr Justice Blake, who ruled on the case, made it clear that forcing people to retire at 65 was unsustainable and needs reviewing.  Indeed, it would appear that the government recognises this because a review of the legislation has already been brought forward by a year to 2010.

Whilst the ruling means that the default retirement age will stay in place for the time being, it is clear that the position is unlikely to remain so for long.

If you have any queries in relation to the information contained in this e-brief please contact a member of the employment team.