On 23 September, we issued an e-update ( Advocate General Rules Against Heyday Case) reporting that the Advocate General to the European Court of Justice had issued an opinion against Heyday's challenge to the UK allowing a compulsory retirement age of 65. The opinion gives an indication of how the ECJ is likely to decide the case: its decision is expected in December.
The Employment Equality (Age) Regulations 2006 contain a procedure allowing employers to fairly dismiss employees, who are aged 65 or over, by reason of retirement and it is this that Heyday is challenging.
Some employers 'retire' employees as a means of avoiding the cost of ongoing pension and life assurance provision, which can become significantly more expensive once an individual attains age 65.
Notwithstanding that 'retiring' an employee means that the employer will cease to benefit from his continuing service and that there are a number of other ways in which an employer can address its pension costs, most employers will hope that the ECJ follows the Advocate General's opinion so that the option to retire an employee who has attained age 65 clears the first hurdle of the Heyday challenge.
The second hurdle to be cleared is that the UK government must be able to objectively justify allowing the practice to continue. This will be decided by the High Court, after the ECJ has issued its decision.
We will report the ECJ and High Court decisions once they are available.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
