British workers hoping to keep their jobs beyond the age of 65 suffered a blow yesterday when Europe’s highest court approved controversial laws that effectively allow employers to force out staff once they reach their country’s mandatory retirement age.

In the case of a Spanish worker challenging his forced retirement, the European Court of Justice said that EU states can introduce and enforce mandatory retirement ages as long as they are justified.

The court said that Spain - which like Britain has a retirement age of 65 - was justified because allowing employers to compel staff to retire at that age helped to reduce unemployment and stabilise the workforce.

Although the case concerns the specific circumstances of a Spanish retail worker, yesterday’s ruling is directly relevant to Britain because British employment laws, which are facing similar challenges, are based on the same Europe-wide principles. In particular, lawyers said that the Luxembourg-based court’s ruling would damage a related claim against British laws being brought by Heyday, an offshoot of the charity Age Concern.

Heyday, which argues that Britain’s retirement age is illegal under EU law, had its High Court case put on hold pending the outcome of yesterday’s ruling because the issues were so similar. Employment experts said that the ruling reduced Heyday’s chance of success significantly.

Rachel Dinely, an employment partner at the commercial law firm Beachcroft, said: “The court is clearly of the view that the imposition of a retirement age is objectively justified and it would be extremely difficult for Heyday or anyone else to argue that the UK does not have similar justifications.”

Although Britain has never had to justify its retirement age before a court, lawyers said that it would be easy to do so on the ground that allowing employers to force workers to retire at 65 introduces an essential element of flexibility in the labour market.

James Baker, a solicitor at Macfarlanes, said: “The court has clearly accepted that mandatory retirement ages are discriminatory but that they can be justified as in this case.”

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