Case update (3): Age discrimination – retiring at 65

beyond-retirementSummary: Can 65 be justified as an appropriate age for mandatory retirement in situations where the Equality Act still allows for mandatory retirements, such as in a partnership?

Yes, says the EAT in the well-known and long-running case of Seldon v Clarkson Wright & Jakes, available here.

Facts: Mr Seldon was a partner at Clarkson Wright and Jakes (CWJ) solicitors and was subject to a partnership deed which provided for partners retiring at the age of 65. Mr Seldon requested to work beyond the retirement age but was refused permission on the basis that there was no business need.

Mr Seldon brought a claim for direct age discrimination and victimisation. The Employment Tribunal rejected his claim, holding that CWJ’s retirement policy pursued three legitimate aims. These were: (i) ensuring associates received the opportunity of partnership after a reasonable period; (ii) facilitating partnership and workforce planning by knowing when vacancies would arise; and (iii) limiting the need to expel partners by way of performance management so contributing to a congenial and supportive culture in the firm.

The Court of Appeal dismissed Mr Seldon’s appeal. Mr Seldon then appealed to the Supreme Court. In April 2012 the Supreme Court rejected Mr Seldon’s appeal, deciding that CWJ had legitimate social policy aims for insisting that he retire – summed up as ‘inter-generational fairness’ and ‘dignity’. However, the case was remitted back to the Tribunal for consideration of whether the selection of the specific age of 65 was a proportionate means of achieving those aims in the circumstances of the particular business.

The Tribunal held that a mandatory retirement age of 65 was a proportionate means of achieving the legitimate aims of retention, planning and (with some caveats) collegiality. Mr Seldon appealed (on the basis of whether or not the specific age of 65 was proportionate).

The EAT held that the Tribunal was entitled to conclude that 65 was an appropriate age, notwithstanding that the point of retirement could have been set at age 66. The EAT rejected Mr Seldon’s argument that, if CWJ’s aims could also have been achieved by a retirement age of 66, it could not justify choosing 65. It would always be possible to argue that the employer could have reduced the discriminatory effect by choosing an age slightly higher than it had – this was just the reality of selecting a ‘bright-line’ date. The key question was whether the chosen age was reasonably necessary to achieve the legitimate aims. The Tribunal had to balance the discriminatory effect of choosing a particular retirement age against its success in achieving the legitimate aims. That balance would not necessarily show that a particular point/age could be identified as any more or any less appropriate than another particular point/age. On the evidence before it, the Tribunal was entitled to find that a retirement age of 65 was reasonably necessary to achieve the legitimate aims identified.

Implications: Although encouraging, particularly in respect of its comments on bright-line dates, the ruling does not represent a green light for employers who have chosen to retain compulsory retirement ages. Whether an employer can justify mandatory retirement will to a large extent depend on the nature of its organisation. This will be a useful decision for some employers given the acceptance that CWJ’s aims of retention and workforce planning could only be achieved by way of a mandatory retirement age, and that a range of retirement ages could potentially have been proportionate.

Further, a note of caution: at the time that Mr Seldon was retired, the Default Retirement Age (DRA) of 65 was still in place and provided a rationale for choosing a retirement age of 65. However, the DRA was repealed in April 2011 and the Tribunal acknowledged that the outcome of his claim might have been different had he retired after that date.