Page last updated at 11:44 GMT, Friday, 25 September 2009 12:44 UK

UK retirement age challenge fails

Stephen Alambritis, of the Federation of Small Businesses welcomed the decision

The High Court has upheld the law that allows UK employers to force workers to retire at the age of 65.

In the UK, a worker can see their employment end at the age of 65 without any redundancy payment - even if they do not want to retire.

However the judge in the case said there was a compelling case for the compulsory retirement age to rise.

Age Concern and Help the Aged, which challenged the rules, will not appeal because they expect the law to change.

Employers welcomed the ruling. The court's decision means that a string of compensation cases brought by people who did not want to retire is doomed to fail.

'Compelling case'

Specifically, Mr Justice Blake decided that the Default Retirement Age introduced by the government in 2006 did comply with an EC Directive against age discrimination.

THE STORY SO FAR...
In the UK, a worker can see their employment end at the age of 65 without any redundancy payment - even if they do not want to retire.
A number of court cases are continuing that challenge this rule, most notably the case spearheaded by Age Concern and Help the Aged which was heard in the High Court in July and which has now been rejected.
However, the government has said it will bring forward a review of the retirement age to 2010, a move that some commentators say signals the end of the default retirement age in the UK as we know it.

However, he did say that there was a "compelling case" for a change in the law, and he would have ordered a review.

The government has announced it is bringing forward a review of the compulsory retirement age anyway, by a year to 2010. The charities believe that this will eventually lead to a change in the rules.

As the law stands, a British employer can dismiss a member of staff without redundancy payments on that person's 65th birthday, as long as they stick to the correct procedure. The charities believe this is in breach of the EU's Equal Treatment at Work Directive.

Employees have the right to request to continue working beyond the date when the employer wants them to retire, but the employer can refuse the request and the law does not require them to give any reason for that decision.

An employer can also refuse to recruit anyone over the age of 65.

Judge's views

Mr Justice Blake said that, although he was ruling against the charities, the decision might have been different if, for example, the legislation had been introduced in 2009 rather than 2006.

Andrew Harrop, of Age Concern, said many workers wanted to carry on

He also signalled that the government's review had been broadly welcomed.

"The position might have been different if the government had not announced its timely review," he said in the judgement.

He added that increasing the retirement age would not block high level jobs to younger generations. An ageing population and the state of the economy were bringing extra pressure on the country's social security system.

"I cannot presently see how 65 could remain as a [default retirement age] after the review," the judgement said.

The ruling means that more than 260 cases pending in tribunals are now likely to be dismissed. These pensioners had been seeking compensation for discrimination.

The majority of people retire before 65, but 1.4 million people work beyond state pension age. It has been suggested that many more would if their employer permitted it.

Reaction

Andrew Harrop, speaking for the charities, said they were "very disappointed" with the decision in the High Court.

However, he claimed that the government's own study into the law should be a fundamental review, as the current situation was unsustainable.

HAVE YOUR SAY
If someone is capable of working and wishes to do so, then why should they be forced to retire?
Kevin Lowe, Wolverhampton, UK

John Wadham, legal group director for the Equality and Human Rights Commission, said: "The number of older employees is increasing and the law should support those who wish to carry on working and making an economic contribution.

"The judge has sent out a strong signal that it is only a matter of time before the default retirement age of 65 is removed, and we will consider what action we could take next."

Stephen Alambritis, of the Federation of Small Businesses, said that employees taking cases to tribunals would have been extremely costly to small firms.

"It is important that a default mechanism is put in place to ensure that it does not all end up tears at employment tribunal," he said.

Adam Marshall, director of policy at the British Chambers of Commerce, said: "Employees already have the right to request to postpone their retirement, and we believe the existing rules allow for the fairest outcome on both sides.

"Businesses need a period of stability to allow all the recent changes to employment legislation to bed down. They do not want more tinkering with employment rules."



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