EUROPE - Forced retirement at 65 can be justified under European law only if it is a "proportionate" means of achieving a legitimate employment policy, European judges have ruled.
The ECJ ruled national legislation may generally allow age discrimination of this kind if it is a proportionate means to achieve a legitimate social policy objective related to employment policy, the labour market or vocational training.
The judgement said: "By their public interest nature, those legitimate aims are distinguishable from purely individual reasons particular to the employer's situation, such as cost reduction or improving competitiveness.
"It is for the national court to ascertain, first, whether the UK legislation reflects such a legitimate aim and, second, whether the means chosen were appropriate and necessary to achieve it."
The case will return to the High Court to decide if the age limit is justified in the UK.
Law firm Lovells said regardless of the ultimate decision in this case, employers should begin thinking about how they would manage their workforces without a default retirement age.
It said the government is expected to review the default retirement age before March 2011 and it seems likely that it will be increased or removed entirely at that stage.
Law firm Irwin Mitchell acted for Age Conern.
Head of public law Andrew Lockley said: "This is a very important decision for anyone who is approaching the current retirement age, many of whom still feel that they have a lot to offer and want to continue working. The law needed clarification, as neither employers nor older employees knew where they stood.
"The ECJ has made it clear that an employer's circumstances cannot be used to justify discrimination on the grounds of age.
"The decision of the ECJ will guide the High Court when it comes to consider whether the UK government can justify the default retirement age of 65. There are also a number of claims of age discrimination by workers who have been retired against their will, which are on hold until the ECJ has given judgment."
Age Concern director general Gordon Lishman said: "We still have a very strong chance of winning in the British courts. The ECJ has said the government must prove to a high standard why forced retirement ages are needed, and those reasons must be based on social or labour market needs, not the interests of employers.
"The government's position is increasingly contradictory. Only last week ministers criticised the 'grey ceiling' which stops people working beyond the age of 65.
"Yet, they continue to consign millions of willing and able older workers to the scrapheap by maintaining the very barrier which prevents them from extending their working lives. It is time for ministers to find the courage of their convictions and abolish the default retirement age without further delay."
Help the Aged director of policy and external relations Paul Cann added: "Today's decision sends a signal that mandatory retirement ages should become a thing of the past. Challenging financial circumstances mean it is even more important for older workers to be able to choose to work for longer if they want to. Ageism in all its forms must be eradicated from our society once and for all."
Proposed changes to The Pensions Regulator's (TPR) notifiable events framework so it can be more proactive when corporates make changes will create a very challenging workload, it has been said.
Aviva has created a new pension skill for Amazon Alexa that allows customers to find out how much they have saved towards their retirement.
PP has compiled a list of what to watch out for over the coming months.
The proposed cold-calling ban may be ineffective if a collaborative regulatory approach between the UK and the European Union (EU) is not maintained post-Brexit, the Pensions Management Institute (PMI) has warned.