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The Employers Forum on Age (EFA) responds to the referral of the decision on retirement ages to the ECJ

6 December 2006

The decision in the High Court today has major repercussions for public sector employers. The referral of the case to the European Courts of Justice (ECJ) puts all public sector organisations seeking to compulsorily retire people at 65 at risk of being retrospectively challenged for age discrimination and unfair dismissal.

Public Sector employees are in a unique position as they can now bring a claim arguing that as their employer is an 'emanation of the state' a tribunal should 'disapply those provisions within the regulations that are clear, unconditional and inconsistent with community law'. It will be up to a Tribunal to decide how to deal with claims; it may opt to stay en masse all claims around retirement until the ECJ makes its decision ¹ . This would leave public sector employers potentially facing thousands of backdated claims for age discrimination if the ECJ rules against the Government.

Private Sector employers are currently not affected and may continue to retire employees at or above the default retirement age (65) as long as they correctly follow the retirement process. However, the ECJ could take as little as 18 months to reach a decision, and if it finds against the Government all UK employers would have to manage without a retirement age within two years.

Sam Mercer, Director of the EFA said:
'It was inevitable that this case would go to the ECJ and in the long run this will give employers a definitive answer over whether mandatory retirement is or isn't lawful.

In the meantime, it does appear public sector employers should be extremely cautious when considering mandatory retirement of any employee. The EFA strongly recommends that employers consider operating without a retirement age or have a clear reason, other than age if they wish to 'retire' an employee against their will.

For private sector employers, it's a case of wait and see. This case could make the lifespan of the default retirement age very short. Employers need to start planning for life without retirement ages."

¹ There is a precedent for this in a case R v Secretary of State for Employment ex parte Seymour-Smith and Perez (House of Lords 17th February 2000) where part time workers were able to bring claims for indirect sex discrimination based on the length of service required for unfair dismissal claims.

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