Insurer AXA today warns that UK employers could be sued to the tune of £60m in backdated discrimination claims for forcing people to retire at the age of 65. 

Axa says employers who do so are acting within the law as it currently stands. However, a ruling awaited by the European Court of Justice (ECJ) could leave them facing expensive compensation claims in the future.

The concern follows the National Council on Aging (NCA) having persuaded the High Court to ask the ECJ if the new UK Age Discrimination Regulations, effective from 1 October 2006, have been implemented properly.

The NCA’s concern is that these regulations allow employers to retire employees at the age of 65 even if they wish to continue working.  So, while the new law permits employees to appeal against forced retirement, it allows employers to retire them compulsorily without having to justify the decision.  This means that even under the new Age Discrimination Regulations enforced retirement at 65 is still legal - it just takes longer.

Steve Folkard, head of pensions and Savings Policy at AXA, says:  “Employers had hoped to avoid having to justify their reasons for retiring employees at 65. However a ruling by the ECJ could leave them under scrutiny.  Employers should review their retirement policies and decision making processes now to protect against retrospective claims.”