Age law faces legal challenge

The UK Government faces a legal challenge to its brand new employment legislation. A pressure group is challenging the fact that the Act allows employers to permit mandatory retirement ages in contracts.

Heyday, an organisation for retired people, is challenging the Regulations, which came into force on Sunday, at the High Court. It is fighting for better employment rights for people over the age of 65.

Heyday argues that the Government failed to properly implement the European Directive from which the law is derived. Its case has been given a hearing date of 6th December. The Heyday organisation is backed by Age Concern.

"Forcing people to retire is denying people the right to work, a right which everyone should have regardless of age," said Neil Churchill of Heyday. "The Government has failed in its legislation around ageism in the workplace. Currently, workers have no rights to stay in employment past 65 and are being driven out of work."

The Employment Equality (Age) Regulations became law on Sunday. The law is designed to make any discrimination in employment, recruitment or training illegal, but there are some exceptions in the legislation which involve treating people differently according to their age.

"Heyday do have a good point and it is a view that is shared by many," said Ashley Graham, an employment lawyer with Pinsent Masons, the law firm behind OUT-LAW. "The default retirement age of 65 was criticised heavily throughout the consultation process on the basis that it undermined the principle of equality and created a safe and convenient loophole allowing employers to retire employees 'fairly' at 65, regardless of whether that was the real reason for their dismissal or not, thereby avoiding potential unfair dismissal claims."

The retirement age is not compulsory, it merely allows employers to insert mandatory retirement ages into contracts. Workers can carry on beyond 65 by agreement with their employer. The Government has said that it will monitor the impact of keeping a default retirement age and said it will conduct a formal review of it in 2011. It has promised to abolish the provision if it believes it no longer needs it.

"One respondent during the consultation process said that it considered this decision to be indicative in itself that the Government realised it was on 'shaky ground'," said Graham. "Others commented that it was difficult to identify what evidence might be different in 2011 in terms of trends in life expectancy, age of the workforce, value of older workers in business and so on. Undoubtedly though, the proposed review in five years time is an invitation to those intent on challenging the legality of the provision, as Heyday are now doing, whilst giving the Government an opportunity to see how the inevitable litigation turns pans out over the next few years."

Another controversial part of the law relates to redundancy. Employees over 41 years of age are entitled to better redundancy packages than those under that age, which some critics say is not consistent with the anti-discrimination aims of the law.

"The Regulations provide that enhanced redundancy schemes provided by employers which offer payments over and above the statutory scheme must mirror the statutory scheme to be lawful," said Graham. "This leads to the slightly bizarre result that if an employer decides to pay all its redundant employees three weeks' pay for every year of service regardless of their age in order to treat them all 'equally', this would be discriminatory in terms of the Regulations."

The other major piece of age discrimination which is specifically protected is that employees on the minimum wage can still be paid less if they are under 21 than if they are over it.

"What matters is the person, their skills and abilities not their age," said Trade and Industry Secretary Alistair Darling. "We are determined to create a world where the best person for the job is just that – the best person. The new laws will help do that."