UK Permitted Broad Discretion to Implement Age Discrimination Law

5 March 2009

On 5 March 2009, the European Court of Justice held that article 6(1) of Council Directive 2000/78/EC did not make compulsory retirement ages unlawful in the case of The Incorporated Trustees of the National Council on Ageing (Age Concern England) v. Secretary of State for Business, Enterprise and Regulatory Reform, Case C-388/07. 

The case involved a challenge by the National Council on Ageing (Age Concern England) to the Employment Equality (Age) Regulations 2006 which were introduced to implement Council Directive 2000/78/EC. Under article 6(1) of the Directive, differences in treatment on grounds of age are permissible if they are objectively and reasonably justified by a legitimate aim, for example where related to employment policy, the labour market or vocational training. Furthermore, the means of achieving that aim must be appropriate and necessary.

The Age Regulations provide that employers may dismiss employees at a “normal retirement age” or in the absence of such an age, at 65 years, without such dismissal being regarded as discriminatory. Age Concern claimed that this aspect of the Regulations constituted a direct general defence for discrimination. It submitted that the Directive did not intend such a widespread defence and therefore the provision was contrary to the Directive’s purpose. Furthermore, Age Concern claimed that correct implementation of the Directive required the UK to set out a specific list of justifiable reasons, by reference to a “legitimate aim”, for differential treatment under national law. Age Concern argued that the Directive intended only to provide for a very limited exception to the fundamental right of non-discrimination.

The European Court of Justice held that as States have a broad discretion as to the manner in which they implement European Union Directives, Council Directive 2000/78/EC could not be interpreted as requiring Member States to draw up a specific list of differences in treatment which may be justified by a legitimate aim and therefore permissible. The Court opined that the wording of the Directive made it clear that the examples given of legitimate aims and justifiable differences in treatment were purely illustrative.  Furthermore, it was for a national court to decide whether a national provision which allowed employers to dismiss workers who have reached retirement age was justified by “legitimate” aims within the meaning of the Directive.

The case demonstrates the difficult balance between freeing work opportunities and retaining skilled labour in the workforce that must be struck with regard to age discrimination legislation. In the fragile economic climate such a system will inevitably make those at the margins of the workforce, particularly those above the compulsory retirement age, most vulnerable. The judgment of the ECJ explained that national courts should decide whether a system of compulsory retirement is justified by a legitimate aim. The ECJ directed that States must establish a high standard of proof in justifying such a legitimate aim, stating:

“Mere generalisations concerning the capacity of a specific measure to contribute to employment policy, labour market or vocational training objectives are not enough to show that the aim of that measure is capable of justifying derogation from that principle and do not constitute evidence on the basis of which it could reasonably be considered that the means chosen are suitable for achieving that aim.” 

To read the ERT case summary click here.

To read the full text of the case click here.