The introduction of age discrimination laws in 2006 has undoubtedly affected the workplace, with policies and practices which disadvantage particular age-groups having largely disappeared.

Despite this, the exception in the age-discrimination regulations which permits compulsory retirement at age 65 means that an employee's working life coming to an end during their sixties, remains the norm.

Compulsory retirement, which, in reality, amounts to an employee being dismissed because of their age, is considered by some to be a blatant form of discrimination and a barrier to achieving a culture where people of all ages are treated equally.

It is perhaps unsurprising, therefore, that the legitimacy of the rules which permit this are being challenged with Age Concern's campaigning arm, Heyday, claiming that UK age-discrimination laws breach European law.

As has been widely reported in the Press, the saga over retirement age took a step forward recently when the Advocate General of the European Court of Justice delivered his opinion in respect of Heyday's claim.

Employers should treat with caution, however, those reports which suggest that the Heyday challenge has reached the end of the line and that UK compulsory retirement rules remain safe. In fact, the case could still make compulsory retirement at 65 unlawful in both the public and private sectors.

To start with, the recent opinion is not binding on the judges of the European Court who may either follow it or decide something different. The full court's judgment is not expected until early next year, and so no rash decisions about the proper approach to retirement policy should be taken before then.

More importantly, even if the court does agree with the Advocate General's rejection of a number of Heyday's technical arguments about the legitimacy of the rule which allows compulsory retirement at 65, the case will still return to the UK High Court for it to conduct its own assessment of whether the rule is objectively justified.

This will require the Government to demonstrate that, when it implemented the retirement law, it had a legitimate aim related to employment policy and that the means used to achieve that aim were appropriate and necessary.

This may not be an easy task given that the retirement exception in the age regulations appears to have been based solely on a desire not to upset established retirement practice. Also, that any employer can dismiss any 65-year-old, irrespective of both business needs and the employee's individual circumstances and irrespective of the state of the local labour market, suggests that the law may not be proportionate.

It could well be late 2009 or even 2010 before the existing uncertainty over retirement age comes to an end when the final outcome of the Heyday case is known.

This, coupled with the Government's stated intention to review 65 as the compulsory retirement age in 2011, suggests that, for now, employers should avoid an approach to retirement age which relies too heavily on the framework of the existing legislation.

Faced with an employee who wants to continue working beyond 65, there are various options to consider. Forcing a retirement is possible although this risks a claim which would be held in abeyance by the employment tribunal until the final decision in Heyday.

Alternatives include finding another reason for dismissal, such as performance; dismissing with a compensation payment made in return for a formal waiver of claims, or agreeing to continued employment, perhaps only a short extension or with a revised, agreed retirement age.

Guy Lamb, Head of Employment at DLA Piper's Leeds office.