UK: Two Recent Age Discrimination Cases

Last Updated: 11 June 2012
Article by Kemp Little’s Employment Pratice Group

i. Compulsory retirement age for law firm partner may be lawful

The Supreme Court has now ruled on the landmark age discrimination case, Seldon v Clarkson Wright and Jakes UKSC 16. The case was about Mr Seldon, a partner in a law firm, and his compulsory retirement at age 65 in accordance with the firm's partnership deed. The case went to the Employment Tribunal in 2006, when there was still a statutory retirement age for employees, but this did not extend to partners, who are self-employed. This meant that the law firm had to be able to justify its retirement of Mr Seldon in order to successfully defend his claim for age discrimination.

The Court found that the three aims identified by the Respondent law firm in order to justify its compulsory retirement of partners at 65 were legitimate aims. These were:

  • giving associates the opportunity of partnership;
  • facilitating workforce planning;
  • avoiding the need to performance manage partners, thus contributing to the "congenial" culture within the firm.

It was found that the test for justifying direct age discrimination is different from the test applicable to indirect discrimination cases. In instances of direct discrimination, any aims identified by an employer must have a social policy element to them, which in this case they did. This is significant, because it means that employers will not be able to rely on reasons relating to their business alone, in particular, the need to save costs.

Arguably, the third legitimate aim identified in this case was itself tainted by the discriminatory assumption that the performance of older employees is likely to decline. However, in holding that this aim was legitimate, the Supreme Court followed a number of European cases in which the need to preserve the "dignity" of older workers was considered.

Comment: The case will now go back to the Employment Tribunal to decide whether 65 (as opposed to some other age) was the right age at which to compulsorily retire partners. Given that the Employment Tribunal will be entitled to take into account the fact that 65 was the designated retirement age for employees in 2006 (when the case was first decided), it seems likely that it will find that the use of this cut-off date was proportionate, and therefore lawful. However, now that the statutory retirement age for employees has been removed, employers may in future find it more difficult to explain why 65, or whatever cut-off point they choose, is the right age to retire employees or partners, as the case may be. Generally, we are finding that employers are dealing with this by not having a policy of compulsory retirement.

http://www.bailii.org/uk/cases/UKSC/2012/16.html

ii. Law degree requirement was indirect age discrimination

The Supreme Court has also just delivered its judgment in Homer v Chief Constable of West Yorkshire Police UKSC 15, this time considering indirect age discrimination. The Claimant in this case was a 61 year old man working for the Police National Legal Database ("PNLD"). The PNLD introduced a new pay structure and decided that in order to achieve the top level of pay the employee would have to possess a law degree. Mr Homer did not have a law degree. He argued that by the time he had studied part-time for a law degree, he would reach the PNLD's normal retirement age of 65, and would therefore be unable to benefit from a pay rise. On this basis, he said that the new pay structure indirectly discriminated against those in his age group.

The Court of Appeal had found against Mr Homer, drawing an (arguably false) distinction between a disadvantage that was a consequence of age, and age discrimination itself. The Supreme Court reversed this decision, finding that there was indirect age discrimination. The case has now been sent back to the Employment Tribunal to consider whether this discrimination was justified.

Comment: Whilst Seldon and Homer provide some very useful guidance, the question of what constitutes lawful age discrimination remains fraught and we would urge employers to review and seek advice on any aspects of their business which operate to discriminate directly or indirectly on the grounds of age.

http://www.bailii.org/uk/cases/UKSC/2012/15.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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