ECJ delivers important decision on compulsory retirement age -
May '09

The European Court of Justice (ECJ) has given its final judgement in the Heyday case regarding compulsory retirement ages. The Court's decision is that the UK's compulsory retirement age of 65 does not breach EU legislation on age discrimination. The Heyday case refers to a provision in UK law that if an employer has not set a retirement age in the UK, then there is a fallback age of 65 which is implied into the employment contract. The ECJ ruled that this is lawful provided there is a public interest aim relating to employment policy, the labour market or vocational training.

The above decision in the Heyday case leaves our understanding of retirement ages in a similar position as it was in the Palacios case. The decision in the Palacios case was that compulsory retirement clauses contained in collective agreements could be lawful provided they are objectively justified.

The High Court will now make the final decision on whether a compulsory retirement age is, in itself, discriminatory.

For Irish employers, the ECJ decision confirms that a retirement age may theoretically be inserted into a collective agreement or contract of employment but that this must be objectively justified.