The battle over the UK’s compulsory retirement age is not yet over, according to specialist employment lawyers today after a first-round ruling from the European Court of Justice.

Their overriding view — in sharp contrast to bodies such as Age Concern and Help the Aged — was that the Advocate-General’s (A-G) opinion was good news for bosses.

Jan Marzak, the A-G, on Tuesday rejected a claim by Age Concern that to compel people to stop work at or after 65 without compensation was a breach of EU equality regulations.

As Sarah Phillips, an associate with Sacker & Partner, put it, the A-G’s opinion “offers member states some freedom to decide what potential age discrimination is justifiable”.

The onus would be on the UK Government to demonstrate that the means (of a compulsory retirement age) justified the ends, she said.

The challenge — which is being watched by some 260 elderly workers in Britain — must still go before the European Court of Justice, where in most, but not all, cases, the judges follow the Advocate-General’s opinion.

Meanwhile, lawyers today said that employers would draw comfort from a ruling that gave national governments a degree of discretion.

Mark Tayler, employment partner with Jones Day, hailed the ruling as a victory for commonsense. “Any other decision would have meant employers can only retire individuals on capability grounds, which is a can of worms that nobody wants to open.

“Employers will always be in favour of an official retirement age in order to have certainty that they can end employment without the process and controversy of having to prove that individuals are no longer capable of doing their jobs.”

Guy Guinan, a partner in the London office of Halliwells, added: “While it maintains an element of discrimination, the Advocate-General’s opinion acknowledges the right of domestic governments to set their own social agenda.”

The decision was a sensible one, he added, allowing employers to “procure a change of personnel for succession purposes” and “ensure that jobs remain available for the younger generation as they graduate from studies to full-time employment”.

Audrey Williams, head of discrimination and diversity law at Eversheds, said: “The challenge has not been thrown out. The Advocate-General has confirmed that UK laws permitting compulsory retirement . . . will stand only if justified.

“Whether or not there are good enough policy reasons for the default retirement age is something that will be determined by a High Court judge, a decision that could take as long as 2011 to be reached, further prolonging the uncertainty for employers.”

The ruling would, meanwhile, give employers reassurance that they will not face a flood of potential claims, she added.

Emma Sanderson, partner at Withers LLP, spoke for many lawyers who said that while a blow to campaigners, employers would breathe a sigh of relief.

Employers saw mandatory retirement as “an essential part of workforce planning,” she said. “Many will also say that it allows them to bring about a dignified exit for employees whose performance may be beginning to decline — many HR managers dread the prospect of having to ‘performance manage’ older employees.”

Stephanie Dale, partner and head of employment law at Stevens & Bolton LLP, pointed out that the Government was already committed to reviewing the mandatory retirement age in 2011.

The ruling was a set back for Age Concern and its campaigning group that brought the challenge, she said. “In the meantime the CBI and employers will be heartened by the view that employers may continue to define the end point of the employment relationship.”

Jonathan Maude, employment partner at Hogan & Hartson, said: “Employers can’t make people retire at 65 — there is a duty to consider requests to work beyond this age. Why would an employer wish to retire an employee who is contributing and then incur all the associated recruitment fees that go with it?”

Will Clayton, employment law partner at Hill Dickinson, drew some good news for employees from the ruling.

The A-G had decided that retirement age was a matter for each member state and could vary from state to state, he said. All that was required was a sound justification that showed that “the retirement age is a proportionate means of achieving the particular state’s legitimate employment policy aims”.

He added: “It is important to remember that under the 2006 regulations, employees now have a statutory right to request to continue working beyond the statutory normal retirement age and there is a statutory procedure that employers must follow to handle those requests.

“Attempts to retire or dismiss employees on the ground of age before the normal retirement age will be unfair and amount to unlawful age discrimination.”

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