In Seldon v Clarkson Wright & Jakes and Secretary of State for Business Innovation and Skills the Court of Appeal upheld a tribunal decision that a law firm’s rule that its partners should be compulsorily retired on reaching the age of 65 could be justified as a proportionate means of achieving legitimate aims. Partners are not ‘employees’ for the purpose of the default retirement age of 65. The legitimate aims were stated to be:
- Ensuring associates were given the opportunity of partnership after a reasonable period;
- Facilitating the planning of the partnership and workforce by having a realistic long term expectation as to when vacancies would arise;
- Limiting the need to expel partners by way of performance management, thereby contributing to the congenial and supportive culture in the firm.
The Court of Appeal did not accept Mr Seldon’s contention, relying on the Heyday decision (see Employment Briefing April 09), that legitimate aims must be of a social policy/ public interest nature. It noted that whilst UK laws should be justifiable by being of a social policy/ public interest nature, the same did not apply to a private employer. It would be difficult for an employer to find such a reason. The Court of Appeal also agreed with the tribunal that the fact that all the partners (with equal bargaining power) had agreed to the rule was a relevant factor.
The government has now launched consultation over its proposal to remove the default retirement age of 65. This will mean that employers will now need to pay close attention to this decision when deciding whether to introduce a retirement age. In Seldon, the Court of Appeal noted that it may not be appropriate to apply the same retirement age across a whole workforce. Employers will need to consider whether the categories of legitimate aim identified in Seldon (noted as ‘dead man’s shoes’ and ‘collegiality’) have been properly used after analysis of whether these are appropriate for a particular sector of the workforce.