In the case of Seldon, the UK Supreme Court decided that the reasons the law firm, Clarkson Wright and Jakes, in which Mr Seldon was a partner, used to justify their fixed retirement age of 65 for partners were legitimate.
In Update 110 we reported the UK Supreme Court’s judgment in the important age discrimination case of Seldon. Essentially, their Lordships decided that the reasons the law firm, in which Mr Seldon was a partner, wished to use to justify their fixed retirement age for partners under their partnership deed were capable, in principle, of providing objective justification for some fixed retirement age. However, the case was remitted to the employment tribunal for consideration of whether the actual age selected by the firm (65) was objectively justified in the circumstances.
Seldon was a partner at Clarkson Wright and Jakes. On 31 December 2006 he was forced to retire at age 65 under the partnership’s mandatory rules. He and the other partners had consented to the mandatory retirement age years previously. Seldon, however, brought a claim against the firm for age discrimination.
To objectively justify indirect discrimination, an employer must show that the discriminatory act was a proportionate means of achieving a legitimate aim. Effectively, the Supreme Court decided that the types of reason put forward by the law firm were potentially legitimate aims in operating a fixed retirement age for partners. Therefore, upon remission of the case from the Supreme Court, the employment tribunal had to decide whether the age selected (65) was a proportionate means of achieving legitimate aims in the particular circumstances of this case.
Last week the employment tribunal found in favour of Clarkson Wright and Jakes. The tribunal held that retention and planning were legitimate aims, that in the particular circumstances collegiality had been a legitimate aim and on the specific facts of this case, the mandatory retirement age of 65 in the partnership’s rules had been a proportionate means of achieving those aims.
The tribunal reasoned that “the lower the retirement age the more harm to the partners who are required to retire and the higher the retirement age the more harm to the associates who may leave”. The tribunal found that if the firm was to be competitive when recruiting and retaining associates then there would need to be a structure in place that allowed for retirement of partners which created clear succession to partnership opportunities in future. This was supported by “… evidence that solicitors would not have joined a practice where there were partners in their 70s and 80s waiting to be paid off”.
As a result, the age selected of 65 was found to be proportionate in the circumstances. However, it is very important to note that the tribunal cautioned that this decision was based on circumstances as they were in 2006, when Mr Seldon retired. There is good reason to believe that a different decision might be arrived at in 2013, following the abolition of the default retirement age in the UK and the pending increases in the state pension age.
As with any first instance tribunal decision, the judgment here is not binding on any other employment tribunals. It remains to be seen if a further appeal will be taken. However, we do not believe that this decision should be taken to mean that employers will generally be able to justify a fixed retirement age of 65.