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In Seldon v Clarkson Wright and Jakes, the Supreme Court has
analysed the factors which can justify a compulsory retirement
age. Unlike other forms of discrimination, age discrimination can
be justified by certain public policy considerations, for example,
objectives related to employment policy or vocational training.
However, the means of achieving those objectives must be
appropriate and necessary. These public policy aims are
distinguishable from individual factors relevant to a particular
employer such as cost reduction and improving competitiveness.
Mr Seldon had been an equity partner in Clarkson Wright and
Jakes since 1972. In 2006, his partnership was automatically
terminated in accordance with a partnership deed which provided for
mandatory retirement at the end of the year in which a partner
reached 65. He claimed that his expulsion was direct age
discrimination, and this was not in dispute. However, the firm
claimed that the compulsory retirement age was justified in
order to ensure staff retention, to facilitate long term staff
planning, and to limit the need to expel partners by performance
management.
Having examined the UK and European case law in this
area, the Supreme Court identified two different kinds of
legitimate objective: 'inter-generational
fairness' and more controversially, 'dignity',
which would include, for example, avoiding the need to subject
older workers to performance management. The Supreme Court
concluded in this case that the firm's aims could
potentially justify Mr Seldon's compulsory retirement. Staff
retention and workforce planning were both related to
intergenerational fairness. Avoiding the need to expel partners by
way of performance management was related to the 'dignity'
objective. However, the Supreme Court has sent the case back
to the employment tribunal to decide whether the age of 65 was
proportionate in these particular circumstances.
This decision has wider relevance now that there is no
default retirement age, since employers need to be able to justify
a compulsory retirement age by showing that it is a proportionate
means of achieving a legitimate aim in relation to their
particular business. Although the judgment provides a useful
analysis of the issues, it does not provide employers with clear
answers. A more detailed discussion on the practical implications
can be found in our recent bulletin 'Seldon v Clarkson Wright
and Jakes - A Cautionary Tale For Employers' (18 May 2012).
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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