Compulsory Retirement Age Not Discriminatory In Seldon v
Clarkson, Wright & Jakes [2010] IRLR 865 the Court of
Appeal confirms that a firm of solicitors was justified in
requiring one of its partners to retire at the age of 65 in
accordance with the terms of its partnership deed. The case is to
go to the Supreme Court.
The facts of Seldon are quite well known: S, a
solicitor and equity partner, challenged the partnership's
decision to retire him at the age of 65 in accordance with the
terms of its partnership deed. S complained of direct
discrimination contrary to Regulation 3(1)(a) of the Employment
Equality (Age) Regulation 2006. The firm succeeded in part in
justifying its policy pursuant to Regulation 3(1) of the Age
Regulations. In particular it relied on the need to ensure that
associates were given the opportunity of partnership after a
reasonable period, facilitating the planning of the partnership and
workforce across individual departments by having a realistic long
term expectation as to when vacancies would arise and, more
controversially, that retirement at 65 fostered an atmosphere of
congeniality in that it avoided the need to take steps to remove
those who, at 65 or over, were underperforming. It is fair to say
that the Court of Appeal was even more receptive to both of these
arguments than the EAT had been.
In giving its judgment the Court of Appeal ruled that in seeking to
justify age discrimination, an employer is not restricted to the
social policy aims which had led the Government to originally
impose an upper age limit of 65 (now to be found in Schedule 9
paragraph 8 to the Equality Act 2010), although it was open (where
appropriate)for an employers policy to mirror those aims. The Court
therefore held that the aim of providing employment prospects for
young persons by holding out good promotion prospects was a
legitimate aim as was the more controversial aim of ensuring a
collegiate culture which the Court describes as an aim to produce a
"happy workplace". Furthermore, in considering the
"proportionality" of the means chosen to implements these
aims, the Court accepted that the age of 65 chosen in the present
case was a proportionate means of ensuring that associates had
promotion prospects which the Court of Appeal appears to have
considered the firm's primary aim. Indeed the Court opined that
once the clause or rule was justified in itself, its application
needs little justification. It certainly did not require the firm
to show that an associate was to be promoted into the
"vacancy" left by S's departure. The Employment
Tribunal therefore had not erred in focussing on the justification
of the clause as opposed to its application. The Court also
accepted that the Employment Tribunal was justified in taking
account of the fact that the parties were of equal bargain power
and S had agreed to this retirement date when he signed the
partnership deed.
Despite the Court of Appeal's robust judgment, further guidance
can be expected from the Supreme Court next year. Furthermore, this
is an issue which will not go away in the light of the
Government's decision to remove the upper age limit with effect
from 1 October 2011. It will then be open to all employees, not
just partners of law firms, to challenge their compulsory
retirement on grounds of age and it will then be for employers to
justify their retirement policies in respect of different
categories of workers.
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