When I’m 65…

The Heyday litigation ended with the publication of the High Court’s judgment last month. After various name changes it now goes by the title R (on the application of Age UK) v Secretary of State for Business, Innovation & Skills [2009] EWHC 2336 (Admin), [2009] All ER (D) 141(Sep). 

The proceedings were an attack on the way the Employment Equality (Age) Regulations 2006 (SI 2006/1031) implemented the age strand of the Employment Framework Directive 2000/78/EC.

Most attention has been focused on the challenge to reg 30, which creates the national retirement exemption. But the status of reg 3—providing a general justification defence to both direct and indirect age discrimination—was also under scrutiny.

The government claimed that both these regulations were within the scope of Art 6 of the Directive, which allows justification of both direct and indirect discrimination where this is “objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational objectives, and if the means of achieving that aim are appropriate and necessary”.

The first stage was a reference to the European Court of Justice (ECJ), which announced its decision in March (C-388/07). In essence the ECJ said that the Directive did not require the implementing legislation to set out the social policy objectives behind it.

Both regs 3 and 30 could in principle fall within the scope of Art 6. It was for the national court to make a judgment on whether they in fact did, assessing the government’s justification arguments in the line with the guidance contained in earlier ECJ decisions.

When the case returned to the High Court, the government was called on to explain why it designed the Age Equality Regulations in the way it did. The main focus was inevitably on its boldest stroke, the creation of the national retirement exemption at age 65, which its critics claim had been an 11th hour adjustment in response to pressure from the CBI.

Justifying the retirement exemption

First, did the government have a legitimate aim in introducing this exemption? The judge held that it did: “It could reasonably conclude on the information it had before it that the implementation of these new important obligations required, at least in the short term, some bright line guidance on the contentious issue of retirement and discrimination.”

Second, were the means chosen appropriate and necessary? As for the principle of a default retirement age it was not “a generalised statement of social worthlessness” but a measure “designed to give certainty and corresponding focus for planning purposes for employers and employees alike”.

But why choose the age of 65? Here the judge was at his most lukewarm: “I do not consider that regulation 30 as adopted in 2006 was beyond the competence of the government in applying the Directive or outside the discretionary area of judgment available in such matters. It was not a bold decision at the time but that is not the test.  It was not a decision for the long term but that fact alone does not make it unlawful.”

So reg 30 survived Heyday’s challenge.  However, the judge made it clear that the position might have been different if the government had not announced its “timely review” and added that he could not see how 65 could remain as the default retirement age afterwards.

Justifying direct age discrimination

Regulation 3 was also given a clean bill of health, but not before the judge had made some observations that are likely to be significant in the future.

Since the ECJ’s judgment it has been unclear whether there is a distinction between the arguments available to the government to justify direct discrimination (in issue in these proceedings) and those that can be used by private employers, assuming the more specific exemptions in the Regulations do not apply.

If social policy aims are the key, how can they be appropriated by private sector organisations? As the judge pointed out “there is an acute policy tension in this area”. 
 

One solution, made explicit in the judgment, is to rely on our domestic courts to read into reg 3 what is required by emerging ECJ jurisprudence to achieve compatibility with Art 6.

But that simply re-states the question. Another approach to the problem is to examine what was said about the government’s social policy aims in the judgment. They are probably defined broadly enough to be used by private sector employers, particularly at the retirement end of the spectrum.

However, the judge pointed our that employers will not enjoy the same margin of appreciation: “The individual employer justifying particular practices or treatment in reliance on that social aim has a much more rigorous task”.

What next?

Age UK will not be appealing, which is an indication that it regards the outcome of the litigation positively. The government—of whatever complexion—will need to conduct the review of the exemption next year in the light of the trial judge’s observations.

It is fairly obvious that if the exemption is retained, the age at which it applies will need to go up, possibly to 70. In the meantime, there are a number of age discrimination claims in the pipeline which may further influence the government’s deliberations. They include three references from Germany to the ECJ and the partnership retirement case Seldon v Clarkson Wright and Jakes, which is now before the Court of Appeal.

Charles Pigott, professional support lawyer, Mills & Reeve LLP. E-mail: Charles.Pigott@Mills-Reeve.com. (See Law reports p 1400.)
 

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