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Age Discrimination Legislation – Challenges

We havepreviously reported that Heyday, an organisation for people in or nearingretirement, has challenged the Government over the inclusion in the EmploymentEquality (Age) Regulations 2006 of a mandatory retirement age, on the groundsthat this means that the Regulations do not fully implement the EC EqualTreatment Framework Directive 2000/78. Heyday wants the legislation amended togive workers over 65 the same protection from discrimination as younger workers.In order to settle the issue, the matter was referred for judgment to theEuropean Court of Justice (ECJ).

The issueas to whether mandatory retirement ages are inconsistent with the EqualTreatment Directive has now been considered by the ECJ in reference to anothercase. The ruling was sought by the Spanish Court in the case of Palacios de laVilla v Cortefiel Servicios SA.

FelixPalacios de la Villa brought an action against his employer seeking theannulment of his dismissal after his contract of employment was automaticallyterminated when he reached the compulsory retirement age of 65. There was acollective agreement in place, governing the employment relations between SrPalacios de la Villa and his employer, which stated that, ‘in the interests ofpromoting employment, it is agreed that the retirement age will be 65 yearsunless the worker concerned has not completed the qualifying period requiredfor drawing the retirement pension, in which case the worker may continue inhis employment until the completion of that period’. Sr Palacios de la Villahad completed the pension qualifying period.

The ECJruled that a compulsory retirement age set by national law, althoughdiscriminatory, was not incompatible with the requirements of the Directive.The prohibition on any discrimination on grounds of age must be interpreted asnot precluding national legislation allowing compulsory retirement clausescontained in collective agreements where such clauses provide as solerequirements that workers must have reached the set retirement age and musthave fulfilled the conditions set out in the social security legislation forentitlement to a pension, provided:

• the measure, although based on age, is objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market; and

• it is not apparent that the means put in place to achieve that aim of public interest areinappropriate and unnecessary for the purpose.

The ECJaccepted that the Spanish practice of allowing the inclusion of compulsoryretirement clauses in collective agreements was adopted as part of a nationalpolicy which sought to promote better access to employment by a betterdistribution of work between different age groups, even though this was notstated precisely in the national legislation. It therefore rejected Sr Palaciosde la Villa’s challenge against his compulsory retirement.

Says CliveMackintosh, “In the light of this judgment, it seems likely that the UKGovernment will be able to defeat Heyday’s challenge by justifying the need fora default retirement age as part of its legitimate employment policy.”

InJune 2007, an application for a stay of proceedings until the ECJ’s decision onthe Heyday challenge was struck out by the Southampton Employment Tribunal(Johns v Solent SD Ltd.). However, the Employment Appeal Tribunal has allowedthe employee's appeal against that decision and the Employment TribunalsService has put all British retirement age discrimination cases on hold pendingthe ECJ’s ruling. This is not expected until at least 2009.