The EAT, in the case of Seldon v Clarkson, Wright & Jakes, has confirmed that an employer may be able to justify mandatory retirement of non-employees at age 65.

Background  

This case concerns a provision in a partnership agreement requiring partners to retire at age 65. The retirement procedure that applies to employees does not apply to non-employees, such as workers and partners. Therefore, any compulsory retirement must be objectively justified.

The Employment Tribunal had dismissed Mr Seldon's claim for age discrimination, holding that compulsory retirement was a proportionate means of achieving the legitimate aims of:

  • retaining associates by being able to offer partnership after a reasonable period;
  • facilitating the planning of the partnership and workforce across departments by having a realistic, long-term expectation as to when vacancies will arise; and
  • limiting the need to expel partners by way of performance management, thus contributing to the congenial and supportive culture of the firm.  

The EAT upheld most of the Tribunal's decision. However, in relation to the last of the aims set out above, it held that the partnership had failed to justify fixing the retirement age at 65. There was not sufficient evidence for an assumption that performance would drop off around age 65 and the Tribunal had fallen into the trap of stereotyping when it upheld that assumption. The case was sent back to the Tribunal to decide whether the first two legitimate aims set out above justify the compulsory retirement age.

Impact on employers

This case is a further example of the difficulty employers face in justifying legitimate aims. It is for the employer to decide for itself what its legitimate aim might be and the equality laws will not generally interfere. However, the EAT has again emphasised the need for employers to have sufficient evidence and/or considered and reasoned explanations as to why a particular way of achieving a legitimate aim has been chosen, if they are to be able to justify a potentially discriminatory practice.