HR Headlines - London Employment Update

Contents Default retirement age is lawful Two ECJ decisions on collective redundancies ECJ decision on holiday entitlement lost due to illness Costs orders against dishonest litigants News in brief Default Retirement Age Is Lawful The High Court has ruled that the UK's Default Retirement Age ("DRA") of 65 is not incompatible with the European Equal Treatment Framework Directive. However, it went on to say that there were "compelling" reasons for advancing the DRA beyond 65 in the future.

In The Queen on the application of Age UK v (i) Secretary of State for BIS and (ii) the EHRC, [2009] EWHC 2336, often referred to as the "Heyday case", the Claimant had argued that two core provisions of the Employment Equality (Age) Regulations 2006 (the "Age Regulations") were incompatible with European law and should be declared invalid. The relevant Regulations in dispute were:

Regulation 3, which permits employers to justify direct age discrimination; and Regulation 30, which provides that it does not constitute unlawful discrimination for an employer to dismiss an employee on the grounds of retirement at age 65. The Court found no illegality in the terms of Regulation 3, holding that its language merely replicated that used in the Directive itself and finding that in any event, the Government had demonstrated clear social policy concerns in protecting the integrity of the labour market.

Considering the legality of the UK's Default Retirement Age, the court said a distinction has to be made between a mandatory retirement age and a designated retirement age (the latter as provided for in Regulation 30). In comparison to a mandatory retirement age, it was noted that "a designated retirement age does not require the employer to dismiss on grounds of age or retirement, but merely enables it to do so when that age is reached without risk of violating the law and being vulnerable to damages claims. The idea of a DRA is not inherently arbitrary and illegitimately discriminatory but is the making of a social choice in the light of a number of social and economic factors".

The Court held that the principle of a DRA was both legitimate and proportionate. The judge said:

"A DRA is not a generalised statement of social worthlessness, but is a measure designed to give certainty and corresponding focus for planning purposes for employers and employees alike. It is a statement that a person is liable to be retired because they have reached the kind of age where it is generally considered appropriate for retirement issues to be addressed."

However, focussing on the question whether 65 was an appropriate age for the UK's DRA, the judge commented that "in the light of changed economic circumstances and the generally recognised problems that a longer living population creates for the...