September 25, 2009 / 11:32 AM / 10 years ago

High court rejects retirement age challenge

LONDON (Reuters) - The High Court has rejected two charities’ legal challenge against the right of companies to force their employees to retire without any compensation at the age of 65.

Senior judge Nicholas Blake upheld the law that allows companies to dismiss staff without redundancy payments on their 65th birthday, although he said a government review next year could raise the retirement age.

“I cannot presently see how 65 could remain as a DRA (default retirement age) after the review,” he said on Friday, according to the Press Association.

Age Concern and Help the Aged, which brought the case, said that while the ruling was a “huge blow,” they too hoped the government review of the rules would change the rules.

“Today’s ruling does not spell the end of our campaign to win justice for older workers,” said Andrew Harrop, head of public policy at the two charities. “We will be stepping up our fight to get this outdated legislation off the statute book.”

The fallout from the recession and higher life expectancy have reignited the debate over the correct retirement age and the treatment of older workers.

Although Britain’s retirement age is 65, companies do not have to impose it. Employers have a duty to consider requests from people to keep on working, but they can refuse them without giving any reason.

The charities brought the case against the government in 2006, arguing that the fixed retirement age broke European Union law and forced about 25,000 people each year to quit their jobs purely because of their age.

The Department for Business, Innovation and Skills welcomed the ruling and said it will form part of its review of the retirement age next year.

Trades Union Congress General Secretary Brendan Barber said the ruling will “allow employers to go on using an arbitrary retirement age as an excuse to weed out staff without having any obligation to compensate them or use fair processes.”

However, employment lawyer Jill Andrew, of Dawsons LLP, said many companies will be “breathing a sigh of relief.”

“Employers rely heavily on the default retirement age to remove the older workers who they feel are no longer bringing value to the business,” she said. “Removing the age bracket of 65 would give firms a major headache.”

Editing by Steve Addison

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