European Court rules mandatory retirement age is legal

The European Union has ruled that mandatory retirement ages are legal in member states following the caes of Palacios v Cortefiel Servicios.

The European Court of Justice (ECJ) said that while age discrimination is illegal, compulsory retirement at a certain age may be appropriate where there is a legitimate aim. The court held that the Spanish firm was justified in forcing out Felix Palacios de la Villa after he turned 65 years old because it was aiming to promote full employment.

Robin Simmons, solicitor at Sacker & Partners, commenting on the implications of the European Court of Justice ruling for UK pension schemes, said the court held that Spanish legislation requiring workers to retire at age 65 years need not fall foul of the EU framework covering age discrimination.

"For UK pension schemes, this gives a first glimpse at how the ECJ will test exemptions in Member States' national legislation against the anti-discrimination principles laid down by the Directive. While recognising that exemptions in national legislation are permitted, it would seem that the ECJ has an appetite to test such exemptions on a case-by-case basis," he said.