Attempts have failed to outlaw the U.K. government-set default retirement age of 65 years, marking the end of a three-year legal tussle. However, because of skills shortages, the High Court’s September decision allowing compulsory retirement to continue will have little impact on construction, claims an industry official.

About 250 pending legal claims against compulsory retirement will now terminate, according to the London-based law firm Pinsent Masons LLP. The court ruling “is good news for employers,” says Jon Coley, a partner. “But...the government has brought forward the review of the [default retirement age, or DRA,] and the smart money is on it extending the DRA or removing it completely.”

Employees forced to retire cannot claim unfair dismissal or age discrimination, nor are they eligible for severance pay, says Richard Leslie, a partner in the law firm Mace & Jones, Liverpool. Safeguards for employees who are 65 years old are “all a bit toothless,” he adds.

However, with construction skills in short supply “even during the current economic downturn,” the civil-engineering sector will not be significantly affected, claims Alasdair Reisner, head of industry affairs at the Civil Engineering Contractors Association, London. “Far from trying to force staff to retire at 65, many firms will be looking to convince valued workers to stay on,” he says.

The court ruling ends a case started in 2006 by a group that now is called Age Concern and Help the Aged (ACHA). The group sought to throw out regulations introduced that year setting the DRA at 65 years old.

Intended as an antidiscrimination measure, “the effect was that more employers decided to have mandatory retirement ages,” says an ACHA spokesman. The proportion of employers imposing retirement has escalated significantly and now stands at about 70%, he adds.

ACHA claimed that setting a DRA contravened a European Union directive on equal treatment. The European Court of Justice, Luxembourg, in March declared the compulsory retirement acceptable so long as the practice was in line with national policy. On that basis, the British High Court threw out ACHA’s case.

Following the ruling, the Equality and Human Rights Commission urged the government to scrap the DRA. “‘The judge has sent out a strong signal that it is only a matter of time before the default retirement age of 65 is removed,” claims John Wadham, the commission’s legal director.

“The government urgently needs to scrap the default retirement age now to help older people weather the recession and build up a decent pension,” says Andrew Harrop, ACHA’s head of policy.

Retirement practices vary widely across the European Union, notes the pressure group Employers Forum on Age, London. In Germany, for example, retirement ages can be agreed upon in union agreements or individual contracts. In France, forced retirement between 60 and 65 years is lawful following collective-bargaining agreements under certain conditions.