QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| The Queen on the application of Age UK
|- and -
|Secretary Of State For Business, Innovation & Skills
- and -
The Equality and Human Rights Commission
|HM Attorney General
Dinah Rose QC & Emma Dixon (instructed by the Treasury Solicitors) for the Defendant
Lord Lester of Herne Hill QC & Diya Sen Gupta for the Intervenor
Hearing dates: 16th, 17th, 20th July 2009
Crown Copyright ©
The Hon Mr. Justice Blake :
i) What are the relevant principles that should apply when adjudicating on the legality of the transposition of a Directive, and in particular what margin of appreciation should the court afford to the executive?
ii) In the light of the applicable principles, are the parts of Regulation 3 complained of, unlawful and inconsistent with the Directive?
iii) In the light of all the available evidence, is the DRA established by Regulation 30 a lawful one?
iv) Can material relating to the evidence given to Parliamentary Committees and the recommendations of those Committees be received and relied on by this Court in determining this application?
The Terms of the Directive
" The prohibition of age discrimination is an essential part of meeting the aims set out in the employment guidelines and encouraging diversity in the workforce. However, differences in treatment in connection with age may be justified under certain circumstances and therefore require specific provisions which may vary in accordance with the situation in member states. It is therefore essential to distinguish between differences in treatment which are justified, in particular by legitimate employment policy, labour market and vocational training objectives, and discrimination which must be prohibited."
"where an apparently neutral provision criterion or practice would put persons having a particular …. age at a particular disadvantage compared with other persons unless:
i. that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary."
Article 4 deals with particular occupational requirements where age or any other prohibited basis of discrimination may be relevant.
"1. Notwithstanding Article 2(2) Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.
Such differences of treatment may include among others:
a) The setting up of special conditions on access to employment and vocational training, employment and occupation…
b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;
c) the fixing of a maximum age for recruitment which is based upon the training requirements of the post in question or the need for a reasonable period of employment before retirement."
The UK Regulations: Regulation 3
Decisions of the ECJ on Age Discrimination
"64. As the national court has pointed out application of national legislation such as that at issue in the main proceedings leads to a situation in which all workers who have reached the age of 52, without distinction, whether or not they were unemployed before the contract was concluded and whatever the duration of any period of unemployment, may lawfully, until the age at which they may claim their entitlement to a retirement pension, be offered fixed-term contracts of employment which may be renewed an indefinite number of times. The significant body of workers, determined solely on the basis of age, is thus in danger, during a substantial part of its members' working life of being excluded from the benefit of stable employment, which, however, as the Framework Agreement makes clear, constitutes a major element in protection of workers.
65. In so far as legislation takes the age of the worker concerned as the only criteria for the application of a fixed term contract of employment, when it has not been shown that fixing an age threshold, as such, regardless of any other consideration linked to the structure of the labour market in question or the personal situation of the person concerned, is objectively necessary to the attainment to the objective which is the vocational integration of unemployed older workers, it must be considered to go beyond what is appropriate and necessary in order to obtain the objective pursued. Observance of the principle of proportionality requires every derogation from an individual right to reconcile, so far as possible the requirements of the principle of equal treatment with those of the aim pursued… such national legislation cannot therefore, be justified under Article 6(1) of Directive 2000/78".
"67. Essentially, he expresses the view that it is not appropriate –or indeed possible– to apply the prohibition of age discrimination to the present case as rigorously as the prohibition of sex discrimination."
Advocate General Sharpston made similar observations in case C-427/06 , (BAILII:  EUECJ C-427/06), Bartsch v Bosch und Siemens Hausgerate GmbH. That case was again not concerned with the Directive but with the principle of equal treatment on the grounds of age as a general principle of Community Law.
"45. In the absence of such precision it is important, however, that other elements taken from the general context of the measure concerned, enable the underlying aim of that measure to be identified for the purpose of review by the courts of its legitimacy and whether the means put in place to achieve that aim are appropriate and necessary (Palacios paragraph 57).
46. It is apparent from Article 6(1) a Directive 2000/78 that the aims which may be considered 'legitimate' within the meaning of that provision, and, consequently appropriate for the purposes of justifying derogation from the principles prohibiting discrimination on the grounds of age, are social policy objectives, such as those related to employment policy, the labour market or vocational training. 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, although it cannot be ruled out that a national rule may recognise, in the pursuit of those legitimate aims, a certain degree of flexibility for employers.
47. It is ultimately for the national court which has sole jurisdiction to determine the facts of the dispute before it to interpret the applicable national legislation, to determine whether and to what extent a provision which allows employers to dismiss workers who have reached retirement age is justified by 'legitimate aims' within the meaning of Article 6(1) of the Directive 2000/78."
"whether the national legislative or regulatory authority could legitimately consider, taking account of the Member State's discretion in matters of social policy, that the means chosen were appropriate and necessary to achieve that aim".
Issue 1: The Principles for Adjudication the Transposition of any Directive into National Law
"71. It cannot be disputed that the encouragement of recruitment constitutes a legitimate aim of social policy.
72. It must also be ascertained in the light of all the relevant factors and taking into account the possibility of achieving the social policy aim in question by other means, whether such an aim seems to be unrelated to the discrimination based on sex and whether the disputed rule, as a means to its achievement is capable of advancing that aim.
73. In that connection, the United Kingdom government maintains that a Member State should merely have to show that it was reasonably entitled to consider that the measures would advance a social policy aim. It relies to that end on Nolte case C-317/93  ECR I-4625.
74. It is true that in the Nolte case at page 4660 paragraph  the Court observed that in choosing the measures capable of achieving the aims of their social and employment policy, Member States have a broad margin of discretion.
75. However, although social policy is essentially a matter for the Member States under Community Law as it stands, the fact remains that the broad margin of discretion available to the Member States in that connection cannot have the effect of frustrating the implementation of a fundamental principle of Community Law such as that of equal pay for men and women.
76. Mere generalisations concerning the capacity of a specific measure to encourage recruitment are not enough to show that the aim of the disputed rule is unrelated to any discrimination based on sex or to provide evidence on a basis at which it could reasonable be considered the means chosen were suitable for achieving that aim.
77. Accordingly, the answer to the fifth question must be that if a considerably smaller percentage of women then men is capable of fulfilling the requirement of two years employment imposed by the disputed rule, it is for the Member State, as the author of the allegedly discriminatory rule, to show that the said rule reflects the legitimate aim of its social policy, that that aim is unrelated to any discrimination based on sex and it could reasonably consider that the means chosen were suitable for retaining that aim."
"The burden placed on the government in this type of case is not as heavy as previously thought. Governments must be able to govern. They adopt general policies, and implement measures to carry out their policies. Governments must be able to take into account a wide range of social, economic and political factors. The Court of Justice has recognised these practical considerations. If their aim is legitimate, governments have a discretion when choosing the method to achieve their aim. National courts acting with hindsight are not to impose an impractical burden on governments which are proceeding in good faith. Generalised assumptions, lacking any factual foundation are not good enough. But governments are to be afforded a broad measure of discretion. The onus is on the Member State to show (1) that the allegedly discriminatory rule reflects the legitimate aim of its social policy, (2) this aim is unrelated to any discrimination based on sex and (3) that the Member State could reasonably consider that the means chosen were suitable for attaining that aim."
"The relevant question is whether the Secretary of State was reasonably entitled to consider the extension of the qualifying period should help reduce the reluctance of employers to take on more people".
"47. Thus where the authority which adopted the Act is alleged to have acted ultra vires, the legality of that Act must, in principle, be assessed at the point in time at which it was adopted.
48. On the other hand in circumstances involving the application to an individual situation of a national measure which was lawfully adopted, it must be appropriate whether at the time of its application the measure is still in conformity with Community Law".
"Here again the matter is debatable. As time passed the consistently adverse impact on women became apparent. But, as with the broad measure of discretion afforded to governments when monitoring measures of this type, so with the duty of governments to monitor the implementation of such measures: the practicalities of government must be born in mind. The benefits of the Order could not be expected to materialise over-night or even in a matter of months. The government was entitled to allow a reasonable period to elapse before deciding whether an order had achieved its objective and, if not, whether the Order should be replaced with some other measure or simply repealed. Time would then be needed to implement any decision. I do not think the government could reasonably be expected to complete all these steps in six years, failing which it was in breach of Community law. The contrary view would impose an unrealistic burden on the government in the present case."
"There must be 'a reasonable relationship of proportionality between the means employed and the legitimate objectives pursued by the contested limitation' a measure that will satisfy the proportionality test only if three criteria are satisfied:
i) the legislative objective must be sufficiently important to justify limiting of fundamental rights.
ii) the measure designed to meet the legislative objective must be rationally connected to that objective. They must not be arbitrary, unfair or based on irrational considerations.
iii) the means used to impair the right or freedom must be no more than is necessary to accomplish the legitimate objective-the more severe the detrimental effects of a measure, the more important the objective must be if the measure is to be justified in a democratic society."
Clayton and Tomlinson, The Law of Human Rights, (2nd Edition 2009) say much the same at 6.92 and add "whether interference strikes a fair balance between the rights of the individual and the interests of the community, which requires carefully assessing the severity and consequences of the interference". The authors address proportionality in the context of Community law at 6.109 where they say:
"The application of the principle of proportionality appears to involve consideration of three elements:
First, whether the measure in question was a useful, suitable or effective means of achieving a legitimate aim or objective; secondly, whether there were means of achieving the aim which were less restrictive of the applicants interest; and thirdly, even if there were a no less restrictive means of achieving the aim available, whether the measure has an excessive or disproportionate effect on the applicant's interest. In practice, however, the question of proportionality tends to be tested in two ways:
• by the balancing test (in other words balancing the object which the decision attempts to achieve against the means applied to achieve it) and
• by the necessity test (in other words where a particular objective can be obtained by more than one available means, the least harmful of these means must be adopted)."
Of course, I am very conscious of the fact that in the performance of this function the court will give very considerable weight to the expertise of government in a field of economic and social policy-making where the court has no relevant experience or institutional competence, but as Lord Bingham pointed out in Huang at  judicial self-restraint is best described in terms of allocation of weight rather than deference, or any suggestion of withdrawal from engagement or adjudication.
Issue 4: Parliamentary Privilege
"in addition to Article 9 itself there is a long line of authority which supports wider principle, which Article 9 is merely one manifestation, is that the courts and Parliament are both astute to recognise their constitutional roles".
In Bradley it appears that submissions were advanced to the effect that the state of the law in the United Kingdom was reflected by the terms of an Australian statute, the Parliamentary Privileges Act 1987. That Act reads as follows:
"In proceedings in any court or tribunal it is not lawful for evidence to be tendered or received, questions asked or statements, submissions or comments made, concerning proceedings in Parliament, by way of, or for purpose of :
(a) questioning or relying on the truth, motive, intention or good faith of anything forming part of those proceedings in parliament;
(b) otherwise questioning or establishing credibility, motive, intention or good faith of any person; or
(c) drawing or inviting the drawing of, inferences or conclusions, wholly or partly from anything forming part of those proceedings in Parliament".
"If the Tribunal either rejects or approves the opinion of the Select Committee it thereby passes judgment on it. To put the point differently in raising the possibility of its reliance on the opinion of the Select Committee, the Tribunal potentially made it subject to submission as to its correctness and of inference which would be a breach of Parliamentary privilege".
i) The court must be astute to ensure that it does not directly or indirectly impugn or question any proceedings in Parliament in the course of judicial proceedings.
ii) 'Impugn or question' extends beyond civil or criminal sanction for any statement in Parliament but includes a judicial determination as to whether a statement in Parliament is right or wrong. The judge cannot receive evidence of what is said in Parliament for the purpose of agreeing or disagreeing with it.
iii) The court must reach its own conclusions on questions of law and the legality of administrative action, subordinate legislation, and whether primary legislation is compatible with the European Convention on Human Rights or provisions on European Community Law. It cannot reach those conclusions by agreeing or disagreeing with the expressions of opinion that may have occurred inside Parliament, however eminent or well qualified may be the people expressing those opinions.
i) The Attorney General in seeking to support the exclusionary rule as a principle of statutory construction by reference to Parliamentary privilege expressly exempted reference to Hansard to explain an exercise of ministerial discretion or to justify domestic legislation where it appears to be contrary to Community law or Treaty obligations (see 610 E-G).
ii) Lord Browne-Wilkinson (at 638H-639C) concluded that the Attorney's contentions on the scope of Parliamentary privilege were inconsistent with the practice which has now continued over a number of years in cases of judicial review where Hansard has frequently been referred to. There was no relevant distinction between that purpose and the construction purpose under consideration in that case. In neither case did his Lordship consider the use of such words by the courts might affect what was said in Parliament.
iii) An example was given by Lord Browne-Wilkinson by way of rejecting the breadth of meaning that the Attorney General sought to attach to the word "question". He noted (at 638 E) :"if the Attorney General's submission is correct any comment in the media or elsewhere on what he said in Parliament would constitute 'questioning' since all Members of Parliament must speak and act taking into account what political commentators and others will say. Plainly Article 9 cannot have effect so as to stifle the freedom of all to comment on what is said in Parliament, even though such comment might influence members in what they say".
He concluded (at 638 G) that:
"The plain meaning of Article 9 viewed against the historical background in which it was enacted was to ensure that members of Parliament were not subjected to any penalty, civil or criminal, for what they said and were able, contrary to the previous assertions of the Stuart Monarchy, to discuss what they, as opposed to the Monarch, chose to have discussed. Relaxation of the rule will not involve the courts criticising what is said in Parliament. The purpose of looking at Hansard will not be to construe the words used by the minister but to give effect to the words used so long as they are clear. Far from questioning the independence of Parliament and its debates, the courts will be giving effect to what is said and done there."
iv) Lord Browne Wilkinson's judgment [at 623 F] also reveals the fact that on the 31st October 1980 the House of Commons resolved as follows:
"That this House, while reaffirming the status of proceedings in Parliament confirmed by Article 9 of the Bill of Rights, gives leave for reference to be made in future court proceedings to the Official Report of debates and to the published reports and evidence of Committees in any case in which, under the practice of the House it is required that a petition for leave should be presented and that the practice presenting petitions for leave to refer to Parliamentary papers to be discontinued".
It appears that the practice was discontinued as permission under the former procedure was usually given. I observe that it was contemplated that reference would be made to the evidence of the Committees. Whilst that statement does not decide the question of what the proper constitutional limits for receiving such evidence are, it is inconsistent with the sweeping proposition that the court ought never to receive such evidence because of some supposed chilling effect upon witness's willingness to give it or the ability of the relevant Committee to obtain it.
v) It is pertinent that it was Lord Browne-Wilkinson who was to give the leading judgment in Prebble, and in my judgment he cannot be taken to have acted in ignorance of or contrary to, what he had said in Pepper v Hart. Moreover, the only dissenting member of the Appellate Committee in Pepper v Hart on the question of relaxation of the exclusionary principle in relation to the statutory construction (Lord Mackay) did not base his conclusions on constitutional principle but practical considerations (See 615G to 616C).
"61. The courts were now under the Human Rights Act required to exercise a new role in respect of primary legislation that was fundamentally different from interpreting and applying it. The courts had to compare the effect of legislation with the Convention right and if the legislation impinges upon a Convention right the court must then compare the policy objective of the legislation with the policy objective under which the Convention may justify a prima facie infringement of the Convention right. In making these two comparisons the court will look primarily at the legislation, but not exclusively so. Convention rights are concerned with practicality. When identifying the practical effect and impugned statutory provision the court may need to look outside the statute in order to see the complete picture, as already instant in the present case regarding the possible availability of a restitutionary remedy… what is relevant is the underlying social development thought to be achieved by the statutory provision. Frequently that purpose will be self-evident. This will not always be so.
62. The legislation must not only have legitimate policy objectives. It must also satisfy a 'proportionality' test. The court must decide whether the means employed by the statute to achieve the policy objective is appropriate or disproportionate in its adverse effect. This involves a 'value judgment' by the court, made by reference to the circumstances prevailing when the issue has to be decided. It is the current effect and impact of the legislation which matter, not the position when the legislation was enacted or came into force…
63. When a court makes this value judgment the facts will often speak for themselves. But sometimes the court may need additional background information tending to show, for instance, the likely practical impact of a statutory measure as to why the course adopted by the legislator is or is not appropriate. Moreover, as when interpreting a statute, so when identifying the policy objective of a statutory provision or assessing the 'proportionality' of a statutory provision the court may need enlightenment on the nature and extent of the social problem ('the mischief') at which the legislation is aimed. This may throw light on the rationale underlined in the legislation.
64. This additional background material may be found in published documents, such as the government white papers. Relevant information is provided by a Minister, or indeed, any other Member of either House in the course of a debate on a Bill, the courts must also be able to take this into account. The courts, similarly, must be able to have regard to information contained in explanatory notes prepared by the relevant government department and published with the Bill. The courts will be failing in the discharge of the new role assigned to them by Parliament if they were to exclude from consideration relevant background information whose only source was a Ministerial statement in Parliament or an explanatory note prepared by his department while the Bill was proceeding through Parliament. By having regard to such material the Court would not be 'questioning' proceedings in Parliament or intruding improperly in the legislative process or ascribing to Parliament the views expressed by a Minister. The court would merely be placing itself in a better position to understand the legislation.
65. To that limited extent there may be occasion for the courts when conducting the statutory 'compatibility' exercise to have regard to matters stated in Parliament. It is a consequence flowing from the Human Rights Act. The constitutionally unexceptional nature of this consequence received some confirmation from the view expressed in the unanimous report of the Parliamentary Joint Committee on Parliamentary privilege (1999) (HL paper 43-1HC 214-1) page 28, paragraph 86 that it is difficult to see how there could be any objection to the court taking account of something said in Parliament when there is no suggestion the statement was inspired by improper motives or was untrue or misleading and there is no question of legal liability ".
"What was said in Wilson, a case about primary legislation, should apply at least as strongly to secondary legislation. Similar consideration should also apply when determining whether legislation enacted for the purpose of implementing a community obligation is compatible with that obligation. In my judgment, therefore, it is clear not only that the principles stated in Pickstone  ICR 697 remain good law but that a wide range of relevant background material can properly be looked at in accordance with the approach approved in Wilson  1 AC 816, albeit subject to care in the use of such material as also emphasised in Wilson".
Social policy aims derived from the legislative background to the 2006 Regulations
"Retirement ages that employers set for employees will be unlawful under the Directive unless they can be objectively justified. We are seeking views on whether the legislation should provide for employers, exceptionally, to be able to justify mandatory retirement ages according to their own circumstances and by reference to specific aims.
We are also asking for comments on a default age of 70 at or after which employers could require employees to retire."
- "Generally the evidence that is currently available does not support the argument that it is essential to continue to allow mandatory retirement. However, that does not necessarily mean the case does not exist at all, rather that any evidence that might support the case is not currently in the public domain and is not therefore available to contribute to the wider debate.
- Receipt of a pension is not synonymous with retirement from paid work. In practice neither the state pension age nor the normal retirement age in occupational pension schemes determines the age at which people actually retire. Some people draw a state or occupational pension and continue working. Others effectively retire before they receive either an occupational or state pension……
- There is no evidence to support the view that older workers are inherently less productive than younger workers except in a limited range of jobs requiring rapid reaction or physical strength and people tend to move out of these as they become harder for them……
- Employers who have introduced flexible retirement schemes have generally done so in the context of performance monitoring systems which either apply to all workers… or only to those beyond normal retirement age. It is likely if mandatory retirement were to be abolished employers generally might have to introduce or strengthen performance monitoring systems. In some cases this would be likely to add to business costs although there is no evidence about the scale of these costs…….
- The macro economic evidence suggests that the impact of restricting mandatory retirement is likely to be very small but positive. Increasing the employment rate of older workers is likely to increase output and living standards and improve the government's fiscal position. However reducing the extent of early retirement is likely to be more important in increasing the employment rate than restricting mandatory retirement".
- "The evidence suggests that, except in a very limited range of jobs, work performance does not deteriorate with age at least up to the age of 70 since few people are employed beyond that age, there is virtually no evidence about work performance after the age of 70.
- The positive effects on performance of experience, interpersonal skills and motivation generally offset the adverse effects of loss of speed, strength and memory.
- Where performance does decline with age the falling average score for older people seemed to be driven by the marked deterioration of a small number of individuals rather than by decline across the whole cohort.
- Older workers have the same ability as younger workers to master the skills but they learn more slowly and can be helped by different training methods.
- Employers may need to introduce new performance monitoring and management systems which will add to business costs."
i) A strong feeling that retirement acts as a natural break and allows people to leave with dignity. Most people do a reasonable job but there is generally deterioration in performances as people get older and retirement is a satisfactory way of ending the employment relationship with dignity. Although performance management schemes are in widespread use performance management was not seen as the right way to get people to leave when it is time for them to go on performance or competence grounds particularly after a long and successful career. It absorbed significant amounts of management time, results in large legal and tribunal costs and the whole approach alters the way in which the performance and management system should be used from a constructive development tool to a punitive one. All the companies interviewed were concerned at the impact on morale and would not wish to take this approach.
ii) With no retirement age the whole process of career management becomes much more difficult. Having a defined age allows for advanced planning, training, employee development and recruitment against a known attrition profile. It allows individuals to see and plan a way upward.
iii) There were health and safety concerns about particular employments.
iv) A retirement age provides focus for individuals to plan for their life when they finish work.
v) The extra cost and uncertainty associated with less predictable retirement attrition may perversely lead companies to move away from the open-ended cost of defined benefit pension provision and result in this benefit being removed for the future service of existing employees.
vi) Declining productivity and associated cost increase was a concern of several employers operating in performance measured environments.
vii) The burden would be greater on smaller employers as they do not have the employment flexibility from having a relatively large work force.
viii) Comparisons with other jurisdictions may be misleading as other employment protection is much less in for example the US.
Mr Warman summarised the response of his consultees as:
"There was a general concern that removal of the retirement age will lead to a loss in competitiveness as costs rise (for all the reasons listed earlier) and management time is absorbed and diverted from growing the business. Taken across the UK as a whole this would damage the country's collective competitive standing"
- The introduction of a national retirement age of 65.
- If considered necessary, the creation of a right for employees to be considered for post 65 working to be mutually agreed.
- The announcement of a review of the impact of the legislation within 5-10 years of enactment.
It appears that these three recommendations proved influential in the ultimate decisions taken by government and all featured in the final package.
"Policy aims underlying the decision on the default retirement age - Introduction:"
The Government's labour market objectives include encouraging the recruitment, training, retention and proper remuneration of workers, and ensuring proper pension provision for them when they retire. There are a number of factors which are required to support those objectives and to ensure that employers are most likely to behave in a way which is consistent, rather than inconsistent with them.
One of those factors is that employers have confidence in the labour market. This means, for example, that they are optimistic about future prospects and trust that the labour market will not be unduly affected by external factors over which they have no control and which will have a detrimental impact on them. In general, business prefers to operate in a climate of certainty and any factors, including labour market factors, that increase uncertainty may have a detrimental effect on confidence. Significant new legislation which affects all employees inevitably will reduce the confidence of some employers because of fears about the impact, which will be uncertain at least until the case law has clarified its effect. If the Government failed to consider the impact of new legislation on business, employers would fear that the impact could be significant. The Government's policy in regulating, therefore, is to ensure that the impact of new measures on business is always taken into account. Levels of employer confidence affect their investment and business decisions, which encompasses their decisions about employees. Without confidence then they are less likely to take the risks which are necessary to ensure increasing recruitment, training, remuneration and proper pension provision.
Employees aged 50 and over constitute a significant and increasing part of the labour market. They presently (2006 2nd quarter) account for 26% of total employment Total U.K. employment grew by 13% between 1992 and 2006 and employees aged 50 and over accounted for 65% of overall net employment growth in that period. Employer confidence is difficult to measure accurately, or to predict, although surveys of employers concerns and expressed confidence are of assistance.
In the context of the labour market objectives mentioned above, and mindful of the need not to jeopardise employer confidence in the labour market (particularly the market for older employees) the Government formulated the social policy aims which informed the Government's decision on the default retirement age. The Secretary of State took the decision to provide for a default retirement age in pursuit of the following two aims:
-avoiding an adverse impact on the provision of occupational pensions and other work-related benefits.
The Secretary of State also considered that other benefits would flow from the default retirement age and that these supported the aim of workforce planning. These benefits included:
- the protection of the dignity of workers at the end of their working lives
- improving the participation of workers in the 50-64 age group; and
- encouraging culture change.
It should be noted that the default retirement age only applies to employees (within the meaning of s.230(1) of Employment Rights Act 1996), civil servants, and certain members of the House of Lords and House of Commons staff. We considered whether we should extend the default retirement age to partnerships and to office holders (including company directors). We concluded that although we had evidence to support the default retirement age for employees and civil servants we did not have sufficient evidence to justify extending the exemption to these other groups.
Policy aim underlying the default retirement age –
(i) workforce planning:
Workforce planning has three aspects in this context:
- that a retirement age provides a target age against which employers and employees can plan work and retirement;
- prevention of "job blocking"; and
- encouraging employees to save for retirement.
The Secretary of State relied on all three aspects of workforce planning in making his decision to provide for a default retirement age. Each aspect is explained in more detail below."
"The Government took the view that the default retirement age was needed to protect the dignity of workers by avoiding a situation in which employers were obliged to dismiss elderly employees on grounds of declining competence at the end of an otherwise unblemished career. It considered that this would be an undignified end to a valuable working life, which would be painful to both sides and likely to damage industrial relations."
"The Government considered that the default retirement age was a useful tool in achieving the wider aim of government policy i.e. improving the participation of the 50-64 age group in the labour market. This is also an aim of wider European social policy, as set out in the 2003 Employment Guidelines. Those employers who would otherwise be concerned about recruiting older workers because of the possible need to deal with their declining competence at a later stage, can recruit such workers in the knowledge that they can retire them without the uncertainty of when and how their working lives will end. "
"Having identified all the above aims, we could not find a less discriminatory way of addressing the totality of our aims in implementing legislation. For example, to some extent the final Regulations addressed the concerns about the levelling down of pensions by exemptions targeted directly at the pensions provisions, on the lines suggested by Mr Harrop. However, such provisions do nothing to address the concerns relating to workforce planning. We have also taken steps to limit the discriminatory impact of the default retirement age. Evidence supporting our legitimate aims suggested the default retirement age was necessary in relation to employees, but evidence was not persuasive in relation to some other groups of workers. Hence the default retirement age does not apply to people such as partners working within partnerships or office holders, for whom the Government was not satisfied it had sufficient evidence of objective justification. Discriminatory impact is also reduced by the new rights in relation to retirement (six months' notice and the duty for employers to consider requests to continue working) which are designed to help to encourage a culture change. "
The response of the claimant and intervenor
i) There has been a move away from the proposition that all retirement age decisions could be justified by employers in the event of a challenge by the employee on the objective and proportionate principles required by Community law, to the position where a default retirement age has been identified as appropriate. The consequence of the default retirement age is that an employer will not have to justify dismissal on the grounds of retirement made in reliance upon that retirement age but only dismissals on the grounds of retirement at an earlier period.
ii) The period selected for the default retirement age of 65 rather than the age of 70 which had been suggested in earlier part of government thinking. 65 is the present age for receipt of state retirement pensions though different provisions for women are being phased in over a transitional period. More recently government policy has identified an onward aim of raising the eligibility for a state retirement pension to 68, being phased in over a number of years in transition provisions. However, not only is the age of 65 too low, it does nothing to create a new culture of severing the connection between the date of actual retirement and the date of eligibility for receipt of either the state pension or occupational pension.
iii) Insofar as the government relied upon the Warman Report in identifying 65 it necessarily relied upon some stereotypical reasoning expressed by consultees to that report that there was a decline in competency after age 65 but it was too embarrassing to address that competence assessments and a default retirement age was a more dignified way of terminating the employment relationship.
iv) The government placed much emphasis upon a new right to be given notice of intention to dismiss on the grounds of retirement age and the right of the employee to make representations against being required to retire, have the opportunity to have a meeting to discuss such representations and thereby to make representations on that issue and to be consulted about it. However, the claimant points out that Schedule 6 to the 2006 Regulations that implement this element in the policy balance do not impose a duty on the employer to give reasons for a decision rejecting the employees' request and it is no longer possible to complain to the Employment Tribunal about the good faith of the employer's decision even though this was contemplated in the original draft of the representations. Thus on this issue as well there has been a shift to the employer's side away from the rights of the employee.
Issue 2: Is Regulation 3 compatible with the Directive ?
i) This Regulation fatally mixes the capacity to justify discrimination by the private employer and the public authority. Albeit that the ECJ in its judgment in the Age Concern case has made plain that the legislation itself does not need to identify the social aims of the legislator in permitting derogation, it also went on to stress that the only aims that are permissible in derogating from the principle of equal treatment with respect to age under Article 6 of the Directive are the social policy aims of government and not the private interest of employers.
ii) A Regulation that combines direct and indirect discrimination and justification of both in the same abstract terminology is vulnerable to employers seeking to justify direct discrimination on the grounds of age by reference to their own individual business needs and in particular the considerations of cost.
iii) Although the Directive permits government to choose its social aims and how and where to express them, a choice must be made, and government cannot choose to delegate the identification of social aims by others.
iv) The inclusion of broad social policy reasons that are undefined in the Regulations themselves or the explanatory notes presented to Parliament violates the fundamental principle of legal certainty. Private parties must know what the social aims are if they are to litigate before the courts the proportionality and necessity of the employers' methods of giving effect to these aims.
Question 3 Is Regulation 30 compatible with the Directive?
i) In the light of the longer term aim of removing a designated retirement age and the intention of reviewing the Regulation in 2011, the designated retirement age under Regulation 30 is effectively a decision to defer implementation of the Directive until after December 2006.
ii) The defendant has not proved to a high standard the existence of a legitimate social policy aim for such a provision.
iii) Any such social policy aim as the defendant has proved to exist was based substantially upon generalisations rather than evidence.
iv) Use of a DRA was not a proportionate way of advancing the aim.
v) If there was to be a designated retirement age at all, the choice of 65 was disproportionate in its effect upon elder workers.
Social policy aim
Proportionately of having a DRA at all
The adoption of 65 as the DRA for employees
"Evidence suggests that allowing older people to continue working, unfettered by negative views about ageing could be a big factor in the success of Britain's businesses and our future economic growth".
a) it is not for this court to identify when a particular age for a DRA is justified;
b) age 65 had some support from past practice in the United Kingdom and the preponderance of consultees and continuing practice elsewhere in the European Union;
c) no one was making a case for age 68 or so and age 70 commanded little popular support in the consultations;
d) An appropriate margin of discretion must be afforded to government in the selection of the age for a DRA and in monitoring the impact of a DRA of 65.
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. Accordingly, despite the concerns I have identified in this part of the judgment, I conclude that it is not ultra vires the Directive and I do not declare it to be void.