The Employment Equality (Age) Regulations, which came into force on 1 October 2006, apply to partnership agreements. It is normal practice for a partnership agreement to contain a compulsory retirement age for partners. The default retirement age of 65 for employees does not apply to partners and any partner forced to compulsorily retire at any age may be able to make a claim for age discrimination against the partnership and the remaining individual partners individually. As a result partnership agreements may now require to be updated accordingly.
In order for a compulsory retirement age in a partnership agreement to be permitted it must be "objectively justified". An objective justification requires that the retirement age is used to achieve a legitimate aim and that the means used in achieving it are proportionate.
If the compulsory retirement age has to be removed from partnership agreements, the issue of a partner's retirement may need to be approached by using proper monitoring and management of their performance, with regular appraisals, and a greater emphasis on performance related pay. The partnership will require to take a pro-active approach to any instances of poor performance by partners. Another approach might be inclusion of a "no fault expulsion" clause within the partnership agreement, which allows a partner to be expelled at the agreement of all the other partners.