The impact of anti-age discrimination both in the UK and across Europe is assessed by Damian Kelly at Birmingham law firm Eversheds
It is heartening to see that progress in the courts, both EU and UK, even if slow, is taking us closer to understanding how the anti-age discrimination legislation applies.
Recent court activity has been promising, and with the ‘Heyday’ case scheduled to be heard in the European Court of Justice on July 2, there may well be a glimmer of light to disperse the current grey clouds of uncertainty.
The Advocate General’s (AG) opinion in the German case of Bartsch v Bosch and Siemens on May 22 considered age gaps in survivor pensions.
The AG indicated that a pension scheme rule in 2004 that disallowed a spouse’s pension where the member is more than 15 years older than the spouse, did not contravene EU law.
This was on the basis that the Treaty on European Union did not prohibit age discrimination. It did however have the power under Article 13 to introduce the Equality Directive, which prohibited discrimination, including age discrimination.
Member States were required to implement the Equality Directive by 2 December 2006, but at the time the 15-year scheme rule was applied to Bartsch in 2004, EU law did not protect against age discriminatory practices as the Equality Directive had not been brought into force, and Article 13 of the Treaty gave no rights to protection against age discrimination.
While the UK implemented the age elements of the Equality Directive on December 1 2006 (with some elements implemented on 1 October 2006), it adopted a specific exemption allowing survivor pensions to be actuarially reduced where the survivor is more than a specified number of years younger than the member. While the AG indicated in Bartsch that such practices are age discriminatory, it suggested that a scaled reduction may be acceptable.
It remains to be seen if the ECJ will follow the Bartsch opinion when it gives its final ruling on the case, or indeed if the exemption in UK age legislation that allows actuarial reductions where a partner is more than a specified number of years younger than the member is compliant with EU law.
In the UK, the Court of Appeal ruling on Johns v Solent SD Ltd on June 12 found that a compulsory retirement claim could be stayed pending the outcome of the Heyday case, despite the employer having complied with UK age legislation. It is argued in Heyday that the compulsory retirement exemption in UK age legislation is not compliant with the European Framework Equality Directive, ie it is ultra vires and therefore void. This casts doubt on the legality of existing compulsory retirement age practices. Despite an extensive consultation exercise at the end of 2007, the Department of Work and Pensions (DWP) have yet to release guidance for employers on flexible retirement and age discrimination.
Eversheds are in favour of statutory intervention in the form of given exemptions allowing employers to formulate robust flexible retirement solutions.
However, the consultation paper indicated the DWP to be in favour of nationally targeted exceptions for given discriminatory practices.
It is unclear just how useful they will be generally for employers/trustees in the short term, or how robust they will be in the long term as they may well be open to challenge by members for falling foul of the European Framework Equality Directive. While it is expected that responses to the consultation will be published over the summer, it may be some time yet before final guidance becomes available. It is promising that some progress is being made, or is expected to be made in the courts to create certainty for employers in respect of UK age legislation.
However, given the pace at which progress is being made by both the Courts and the DWP, the grey clouds of uncertainty are expected to be around for quite a few summers.