The Supreme Court has held today that a compulsory retirement age of 65 in a partnership deed can be justified under the age discrimination legislation. It has upheld the Court of Appeal decision in the important case of Seldon v Clarkson Wright & Jakes.
When this case was first launched, the statutory default retirement age remained in place for employees so the case's relevance for employers (rather than partnerships) was limited. Now that the default retirement age has been abolished, the principles set out in Seldon are vitally important to any employers wishing to impose a compulsory retirement age.
Mr Seldon was a partner in a law firm and claimed that the compulsory retirement age in the partnership deed was discriminatory on grounds of age. The Employment Tribunal, the EAT, the Court of Appeal and now the Supreme Court have all agreed that whilst a mandatory retirement age is directly age discriminatory, it is capable of being objectively justified. The Court reviewed the age discrimination decisions made to date by the European Court of Justice and held that there are two different types of legitimate objective that are permissible in age discrimination cases – inter-generational fairness (i.e. recruitment, retention and succession planning) and dignity, which includes slightly more controversial aims such as avoiding the need to go through capability procedures with older employees and the avoidance of costly and divisive disputes about capacity or underperformance. Aims falling into both of these categories had been pleaded by the respondent firm and the Supreme Court accepted that they were potentially legitimate.
Whilst this judgment is potentially useful for employers and partnerships alike, this is not the end of the line for Mr Seldon – the case now has to be remitted to the employment tribunal to decide whether the firm's actions were justified in these particular circumstances.
Look out for our next law watch which will contain further analysis of the Seldon judgment and other current age discrimination issues.