The Supreme Court in the UK has held that compulsory retirement ages are capable of being lawful.
The case concerned a partner in a law firm who was compulsorily retired at 65, in line with the retirement clause in the partnership deed. He claimed that this was discriminatory treatment on the ground of age.
The Court considered whether:
- The treatment was objectively and reasonably justified by a legitimate aim
- The means of achieving that aim were appropriate and necessary
In addition, the Court, for the first time, considered the “public interest” element of the aim and held that to be capable of justification, the aim must be in the general public interest as distinct from the individual interest of the particular business.
The partnership put forward a number of aims to justify the use of the compulsory retirement age. The Court accepted that some of these aims (which related to recruitment, retention and succession planning, and preserving the dignity of older workers by limiting the need to expel older partners by way of performance management) were legitimate. The Court also found that the use of a compulsory retirement age was a proportionate means of achieving these aims even though in itself, this treatment was directly discriminatory.
Upon this finding, the Supreme Court sent the matter back to the UK Employment Tribunal to decide whether the selection of the retirement age of 65 was the appropriate age for achieving the legitimate aims. The Tribunal recently held that it was.
Whilst this decision demonstrates that compulsory retirement ages are capable of being lawful, employers who choose to use them should be mindful that if challenged, they must, firstly, be able to justify the use of a compulsory retirement age by reference to a legitimate aim and, secondly, prove that a compulsory retirement age is an appropriate and necessary means of achieving that aim.
It remains to be seen whether the Irish courts will follow the UK Supreme Court and add this third “public interest” element to the test for justifying direct discrimination.