UK workers hoping to keep their jobs beyond the age of 65 suffered a severe blow today after Europe's highest court approved controversial laws that effectively allow employers to force out staff once they reach their country’s mandatory retirement age.

In the case of a Spanish worker challenging his forced retirement, the European Court of Justice said that EU member states can introduce and enforce mandatory retirement ages as long as they are justified.

The Court said that Spain - which like the UK has a mandatory retirement age of 65 - was justified because allowing employers to compel staff to leave at 65 helped reduce unemployment and stabilise the workforce.

Although it concerns the specific circumstances of a Spanish retail worker, this morning’s ruling is directly relevant to the UK because British employment laws, which are facing similar challenges, are based on the same Europe-wide principles.

In particular, lawyers said the Luxembourg-based Court’s ruling would damage a related claim against UK laws being brought by Heyday, an offshoot of the charity Age Concern.

Heyday, which argues that Britain’s retirement age is illegal under EU law, had its High Court case put on hold pending the outcome of today’s ruling because the issues were so similar.

Heyday had no immediate comment this morning but several employment experts, including Daniel Barnett, a barrister at 1 Temple Gardens, said the ECJ ruling significantly reduced its chance of success.

Rachel Dinely, an employment partner at Beachcroft said: “The ECJ is clearly of the view that the imposition of a retirement age is objectively justified and it would be extremely difficult for Heyday or anyone else to argue that the UK does not have similar justifications.”

Although the UK has never been pushed to justify its mandatory retirement age before a Court, lawyers said it would be easy to do so on the grounds that allowing employers to force workers to retire at 65 introduces an essential element of flexibility in to the labour market.

“While Heyday may persist in their challenge regardless of this development, employers can take immediate comfort from what is clearly a sound and sensible view,” Ms Dinely said.

“Conversely, employees who had contemplated challenging their employer’s decision to require them to retire on reaching age 65 may reluctantly accept the decision, and recognise that any challenge through the Employment Tribunal is now very probably futile.”

Britain’s age discrimination laws, introduced last October, allow employers to force a worker to retire at 65 regardless of whether they are capable of continuing in the role, as long as certain procedures are followed.

“Today’s ECJ decision means that employers can continue to carry out financial and succession planning. They have the certainty of knowing that if they follow the procedure carefully, they can require people to leave their employment at a particular time,” Ms Dinely added.

Age discrimination laws are unusual because they allow employers -or Governments – to discriminate on the grounds of age as long as it can demonstrate a wider justification. James Baker, a solicitor at Macfarlanes, said: “The ECJ has clearly accepted that mandatory retirement ages are discriminatory but that they can be justified as in this case.”

The ECJ’s reasoning is similar to that of the London Employment Tribunal which last week cleared law firm Freshfields Brickhaus Deringer of discriminating against a former partner on the grounds of age.

The Tribunal said that changes the to firm’s pension scheme, which formed the basis of former partner Peter Bloxham’s complaint, were discriminatory but justified because they solved a wider financial issue at the firm.

The ECJ case was Felix Palacios de la Villa v. Cortefiel

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