The Supreme Court has dismissed an appeal by lawyer Lesley Seldon, who challenged his firm’s right to retire him at the age of 65.
Seldon launched proceedings against Clarkson Wright & Jakes (CWJ) in March 2007, arguing that his forced retirement was an act of direct age discrimination and the firm’s subsequent decision to withdraw the offer of an ex gratia payment was an act of victimisation.
Seldon’s case was supported by the Equalities and Human Rights Commission (EHRC) from the Court of Appeal (CoA) stage, with Cloisters’ Robin Allen QC instructed to lead the challenge.
The firm instructed Blackstone Chambers’ Thomas Croxford, while the Secretary of State for Business Innovation and Skills drafted in Blackstone Chambers’ Dinah Rose QC to lead its arguments in support of the firm.
Age UK also intervened, with Irwin Mitchell associate Liesel Whitfield instructing Cloisters’ Declan O’Dempsey.
The Supreme Court ruled that Seldon’s firm did have some valid reasons for having a mandatory retirement age for partners. However, it referred the case back to the Employment Tribunal to consider whether forcing partners to leave after their 65th birthday was appropriate and necessary.
Giving the leading judgment, Supreme Court Justice Baroness Hale said that to justify a policy it is not sufficient for an employer to show that it has an aim that is capable of being a public interest aim; they need to show in addition that it is actually a legitimate aim in the particular circumstances of the employment.
Cloisters’ Caspar Glyn QC commented: “This decision represents a significant narrowing of the circumstances that may be relied upon to justify direct age discrimination. Any employer which still has a policy of compulsory retirement would be well advised to review this in the light of the court’s remarks.”
The court also delivered its verdict in a separate age discrimination case, Homer v Chief Constable of West Yorkshire Police.
Homer, who worked as a legal adviser with the police national legal database, claimed he was indirectly discriminated against on the basis of his age because he was ineligible for a promotion that required him to have a law degree. As he did not have enough time to complete a law degree before retirement Homer argued that he was being discriminated against.
The Employment Appeal Tribunal (EAT) and CoA both ruled that his disadvantage was caused by his impending retirement not his age.
Today’s ruling stated that a requirement that works to the comparative disadvantage of a person approaching compulsory retirement age is indirectly discriminatory on grounds of age. The court referred to the “unreality in differentiating between age and retirement”.
The court unanimously allowed Homer’s appeal, finding that he was indirectly discriminated against. The court referred the case to the Employment Tribunal to reconsider the issue of justification.
Cloisters also led the challenge for Homer, with Robin Allen QC leading Declan O’Dempsey instructed by McCormicks partner Neil Goodrum. They faced 11KBW’s Clive Lewis QC, who was drafted in at the Supreme Court stage to lead Broadway House Chambers’ David Jones, who led the case at the CoA.
Equality and Human Rights Commission general counsel John Wadham: “The judgments remind employers that a worker’s age is not shorthand for their competence and should never be used in that way. An employee’s ability to do a job should not be based on out of date assumptions about what people can do as they get older.
“Every employer must think carefully about whether it really needs to have a policy that directly or indirectly discriminates against people based on their age. The court has made it clear that such policies must be justified on a case by case basis.”
Kingsley Napley partner Richard Fox: “This is a significant decision not just for partnerships but all companies craving certainty and guidance about how to handle issues of retirement and succession.
“The abolition of the default retirement age and increasing numbers of people wanting to work longer to make up for inadequate pension provision, combined with economic pressure on jobs, is a real conundrum for employers.
“In that sense the guidance offered by the Supreme Court today that it is possible to justify compulsory retirement on specific grounds is very much to be welcomed.”
Irwin Mitchell partner Tom Flanagan: “The outcome provides businesses with clearer guidance in relation to their own retirement policies.
“The Supreme Court has required what looks like a more restrictive interpretation of those issues, which means that an employer can have its own default retirement age (DRA), but only if its legitimate aim satisfies public policy objectives, as well as its own internal ones, and it is prepared to gather sufficient evidence in order to justify the means of achieving it.”
Russell Jones & Walker partner Clive Howard: “Seldon is disappointing given the recent abolition of the forced retirement of employees, since it upheld that a partner at a law firm could, in principle, be forced to retire at a given age.
“However, employers should not form the view that this means it will be lawful to force staff to retire at 65 up and down the country. There were specific factors which applied to this small law firm in Kent, which will not be relevant to every organisation.”
Stewarts Law partner Arpita Dutt: “The judgment of the Supreme Court in Seldon provides some clarity that where businesses are seeking to maintain reliance on a particular retirement age for some or all of their employees, their objectives must be readily identifiable and of a public interest nature, which would include sharing out professional employment opportunities fairly between the generations.
“Unfortunately, the judgment leaves open the big question of whether 65, 70 or any other age would be a justifiable retirement age.
“The reality for many businesses is that they have abolished any fixed retirement age and are instead choosing to rely on performance management procedures.”