There has been much press coverage of the recent High Court decision in the Heyday case (brought by the charity now known as Age UK) with respect to the finding that the Default Retirement Age (DRA) of 65 in the Age Regulations is lawful. There are, however, additional interesting points which arise out of this decision which have not made the headlines, which we explore below.
The main decision
The judge concluded that the Government's decision to adopt a DRA was "legitimate and proportionate", on the basis that it does not require an employer to dismiss an employee on the grounds of their age or retirement, but enables an employer to do so at a particular age without contravening the law and placing itself at risk of a claim (provided the procedure in the Age Regulations is followed). As such, it serves to give certainty to both employers and employees.
Direct discrimination
The judge adopted an interesting approach to the issue of why direct discrimination on the grounds of age, and not other forms of discrimination, can be objectively justified. The test for both forms of discrimination is the same: the treatment or provision should be "a proportionate means of achieving a legitimate aim".
In all other kinds of discrimination, direct discrimination is only permissible where a genuine occupational requirement can be identified. The judge stated that the reason for the difference in age discrimination is that the Regulations will apply to everyone at some stage, as we are all getting older! He explained that:
"Unlike the immutable characteristics of racial and gender identity all of us grow older each year, and all of us face decisions about retirement."
It is worth noting on this issue that although the judge found that it was lawful to justify direct age discrimination, in the case of MacCulloch v ICI (2008), the EAT made it clear that it will be more difficult to justify direct discrimination than indirect discrimination.
Plans for the future
Despite finding that the DRA of 65 is lawful, the judge advocated increasing it in light of the current economic situation, and described the Government's decision to adopt a DRA of 65 as "particularly odd" in view of the fact that the pensionable age is expected to rise to 68 by the middle of the century.
In reaching his decision, the judge was required to consider the lawfulness of the DRA at the time the law was passed, in 2006. Most interestingly, and significantly, he commented that if the DRA of 65 had not been adopted until now, or if the Government had not stated that it would be reviewing the DRA imminently (just days before the case was heard, the Government announced that it would bring forward its review of this to 2010), he would have concluded that a DRA of 65 was not a proportionate means of achieving a legitimate aim, and therefore not lawful. He added that, in his view, the DRA could not remain at 65 after next year's review.
Implications for non-employees
The DRA provisions, unlike other provisions of the Regulations, apply to employees only. On each occasion that a business has a contractual retirement age for a worker, partner, consultant or non-executive director, or wishes to retire someone who is not an employee because they have reached 65, the business needs to objectively justify it. In view of the judge's overall disapproval of 65 being an acceptable retirement age and the ICI case, that direct discrimination is difficult to justify in any event, businesses will have a tremendous struggle trying to justify the age-related removal of someone who is not an employee.
Conclusions
The decision is helpful for employers that want to be able to retire employees who are 65 or older. However, the decision is not helpful for businesses with a workforce that contains a significant number of people who are not employees.
It is clear that a DRA of 65 is not here to stay and we can expect changes in the near future.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
