EU court says UK retirement law is justified

A law that gives employers the right to force staff to retire can be justified if it is part of a wider social policy, the European Union's top court said Thursday.

The ruling leaves British law unchanged, delighting employers but disappointing lobby groups for older people, which vowed to take their fight for the right to continue working beyond 65 years of age back to the British courts.

The law puts into effect an EU directive and allows companies to dismiss an employee without redundancy payments when the worker reaches 65 or the mandatory retirement age set by the company.

The European Court of Justice said EU law allowed for such discrimination on the grounds of age if it were part of a wider social policy.

"This kind of difference of treatment on grounds of age is justified if it is a proportionate means to achieve a legitimate social policy objective related to employment policy, the labour market or vocational training," the court said in a statement.

"It is for the national court to ascertain, first, whether the United Kingdom legislation reflects such a legitimate aim and, second, whether the means chosen were appropriate and necessary to achieve it," the court said.

Heyday, the membership organisation of lobby group Age Concern, had complained Britain was not applying the EU law properly. Britain argued its law did not fall within the scope of the EU rules.

Age Concern and another British charity it is merging with, Help the Aged, said the High Court would now have to look carefully at whether a default retirement age was justified under EU law on the grounds of social policy and not the interests of individual businesses.

"The government continues to consign tens of thousands of willing and able older workers to the scrapheap," Age Concern Director General Gordon Lishman said.

The government has just scrapped mandatory retirement ages for civil servants but has failed to change the law to benefit all employees, Lishman said.

Thousands of employers and staff have been locked in confusion and costly proceedings over the legality of enforcing a default retirement age of 65, said Tim Marshall, head of employment practice at law firm DLA Piper.

"Now we must endure further litigation as the UK High Court conducts an assessment of whether the default retirement age can be objectively justified," Marshall said.

Jo Keddie, head of employment at Dawsons law firm, said the government could breathe a sigh of relief as the High Court was likely to determine that compulsory retirement at 65 was justified.