Retired and emotional

Seldon age discrimination case could prove Supreme acid test for compulsory retirement

Last week the Supreme Court ­convened five of the country’s most senior judges to hear a landmark case concerning the social justifications that can be used to justify retiring a partner.

Leslie Seldon had issued Employment Tribunal proceedings against Kent-based Clarkson Wright & Jakes in which he argued that the decision to retire him at 65 amounted to ­unlawful age discrimination. (The default retirement age provisions in the age regulations did not apply to partnerships; consequently, since the introduction of the age regulations in October 2006, partnerships have been required to justify their use of a retirement age.)

A tribunal, the Employment ­Appeal Tribunal and the Court of ­Appeal (CoA) all rejected his claim. They all held that the firm’s use of a retirement age was justifiable.

In the CoA it was held that the firm’s legitimate aims for using a ­retirement age – namely, enabling associates to move up the ranks to partnership; facilitating the workforce planning of the partnership; and limiting the need for partners to be expelled by way of performance management, all of which contributed to a congenial and supportive culture in the firm – were justifiable in the circumstances of this case.

The Supreme Court is now about to give its judgment, and what makes this decision potentially significant is that the default retirement age provisions (which applied to employees but not partnerships) have now been repealed.

Accordingly, the Supreme Court may use this case as an opportunity to offer some general guidance on when it might be justifiable for ­employers to use a retirement age.
With the removal of the default ­retirement age it must be questioned whether having a “congenial and supportive culture in a firm” that does not need to have performance management is both necessary and appropriate.

Similarly, will it now be enough to put forward as a legitimate aim that of enabling associates to move up through the ranks? And furthermore, even if this is held to be a legitimate objective, will its continued use be considered proportionate? 

A retirement age could be said to assist in the fight against youth ­unemployment, because when ­vacancies are created towards the top end of an organisation this will have a drip-down effect and create new posts at the junior end.

Of course, this argument only holds water if you work on the ­assumption that junior roles are filled by junior (read younger) members of staff, and vice-versa, which would appear to go against the very thing age discrimination legislation was brought in to prevent in the first place – ie employers making assumptions about employees’ capabilities based on age.

It will be interesting to see whether the Supreme Court takes these issues into consideration and, if so, what its opinions are on them.

There is little doubt that these views will form the basis of further litigation around this point as ­employers struggle to manage their older employees without the safety net of a default retirement age to fall back on.