Default position

R (on the application of Age UK) v Secretary of State for Business Innovation and Skills and ors

In a move that has proven highly controversial, the Government decided, when drafting the age regulations, to introduce a default retirement age (DRA) of 65. In R (on the application of Age UK) v Secretary of State for Business Innovation and Skills and ors, the High Court has now said that this was perfectly legal.

Basic facts

The Employment Equality (Age) Regulations came into force in October 2006 in order to give effect to the EC Equal Treatment Framework Directive 2000.

On 3 July 2006, however, the charity Age Concern started judicial review proceedings in the High Court, arguing that regulation 30 (among others) did not implement the directive properly. The High Court referred the matter to the European Court of Justice (ECJ) for clarification (see LELR 115).

Two days before the case returned to the High Court, the Government announced a review of regulation 30 which, it has said, will take place in early 2010.

Relevant law

Regulation 30 states that employers can dismiss employees “at or over the age of 65 where the reason for the dismissal is retirement”, as long as they follow a specified procedure.

Article 6(1) of the directive allows member states to exclude certain differences of treatment on grounds of age if “they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.”

ECJ decision

The ECJ said that regulation 30 did not “establish a mandatory scheme of automatic retirement” as such. Instead, it just laid down the conditions under which employers could modify the principle prohibiting discrimination on grounds of age.

The modifications made by the Government could therefore be lawful, but it was for the national court to decide whether the regulations fulfilled the social policy aims set out in article 6(1) and whether the means chosen were appropriate and necessary to achieve them. It added that the required standard of justification would be “high”.

High Court decision

The High Court agreed with the Government that social policy aims can be broad and can include “the integrity of the labour market and its short-term competitiveness”.

It concluded, on the basis of evidence put forward by the Government, the explanatory notes to the regulations and the wide consultation process preceeding their introduction that it had proven to the “requisite high standard” that a DRA was a proportionate means of achieving those social policy aims.
It then went on to say, however, that “there were powerful reasons” why the Government should have adopted an age higher than 65. This, it said, would have created a change of culture with respect to retirement and age discrimination by breaking the connection between retirement age and pension age. It said that the choice of 65 was particularly odd because the pension age was likely to rise to 68.

It concluded that if Regulation 30 had been adopted for the first time in 2009, or there had been no indication of an imminent review, it would not have found that a DRA of 65 was proportionate.

However, the court accepted that the starting point had to be 2006 when the regulations were introduced. It also accepted that it was not the job of the court to decide when a particular age for a DRA was justified, and that the consultation process showed a lot of support for age 65, as opposed to 68 or 70. On that basis, an “appropriate margin of discretion must be afforded to government in the selection of the age for a DRA and in monitoring the impact of a DRA of 65”.

Regulation 30 as adopted in 2006 was not therefore unlawful, although the court could not see “how 65 could remain as a DRA after the review”.