Legal Village

The Heyday challenge: fanning the flames

Posted 30/09/2008 by Clare Murray

The Heyday challenge received a setback last week - its argument that mandatory retirement ages are unlawful faltered at the first hurdle. The Advocate General (whose opinion the European Court of Justice normally follows), determined that the setting by national law of a mandatory retirement age for employees is not automatically unlawful. Further he indicated in his judgment that member states have wide discretion when applying the objective justification test.

Although the Advocate General’s decision is not binding and may not be followed by the European Court of Justice (ECJ) when it hands down its decision later this year, it adds further fire to the age discrimination debate.

The frame of reference considered by the Advocate General was actually fairly narrow. It is clear from the judgment that his remit did not extend to determining whether or not the UK’s retirement legislation is compatible with the European Directive 2000/78; instead, he considered whether the principle of a mandatory retirement age is in itself permissible. And his response to this question was a resounding yes: member states can put in place legislation requiring employees to retire at 65 without being in conflict with European law. The question will then be whether such a rule can be objectively justified. The Advocate General referred to the decision reached last year in the Spanish case of Palacios de la Villa, which provided guidance on mandatory retirement ages.

Age Concern also argued that the UK’s Employment Equality (Age) Regulations 2006 breached the Directive by not listing the types of direct/indirect discrimination, which can be justified. The charity suggested that the Directive required member states to include an exhaustive list of the kinds of less favourable treatment which can be justified; consequently, the general justification defence contained within the Regulations did not in their opinion adequately implement European law. Quite sensibly in our opinion, the Advocate General rejected this argument as he said it would be impossible to list in a schedule all the different scenarios which may arise.

But what about the vexed question of justification? Unfortunately, the decision does not offer much clarity on this issue. Age Concern attempted to argue that the Directive creates two different justification tests for direct and indirect discrimination (under Article 6(1) and Article 2(2) of the Directive respectively); that the test for direct discrimination is stricter and only in exceptional circumstances can direct discrimination be justified. However, the Advocate General rejected this argument and said that the differences between the two tests had no practical significance. When considering the issue of mandatory retirement ages for employees, courts have to consider whether the national law can be objectively justified, using appropriate and necessary means. Further, the judgment makes clear that member states should be given a relatively wide discretion in identifying the means to be used in achieving such a legitimate aim when addressing social and employment policies. Unhelpfully, no guidance was given as to how this would work in practice.

So it is a guessing game as to whether the Employment Appeal Tribunal’s decision on Seldon - the partnership age discrimination case regarding objective justification of a mandatory retirement age of 65 contained in a partnership agreement - or the ECJ’s decision on Heyday will be published first. Until those cases are decided, both employers and partnerships are equally in the dark as to whether a mandatory retirement age, whether imposed by state or partnership, will be regarded as potentially lawful under the age discrimination legislation.  

Clare Murray and Charis Damiano are partners at employment and partnership law firm CM Murray.