Another decision of general interest has been reached in relation to the default retirement age.
In our July 2013 update we reported on the long-running case of Seldon, which went all the way to the Supreme Court (SC). The SC confirmed that a compulsory retirement age of 65 for Mr Seldon (S), a partner in a law firm, could be objectively justified, and did not constitute unlawful age discrimination.
The case was remitted to the Employment Tribunal, which held that the chosen compulsory retirement age of 65 was a proportionate means of achieving the legitimate aims of retention of younger members of staff and succession planning in the firm.
After a further appeal by S to the Employment Appeal Tribunal (EAT), this decision has again been upheld. The EAT held that:
- the chosen compulsory retirement age of 65 was a proportionate means of achieving a legitimate aim, and S’s claim that a higher age, such as 68 or 70, could have been chosen, was dismissed;
- the tribunal’s approach of identifying a narrow range of proportionate ages (64-66) was upheld, although the EAT commented that such a balanced approach would not necessarily show that a particular age could be identified as any more or less appropriate than another particular age;
- it was appropriate to take account of factors such as the partners’ consent; the retirement age chosen for partners was the same as that chosen for associates; the State pension age; and the default retirement age (which was in force in 2006 when the original case was brought); and ECJ judgments which have upheld a retirement age of 65.
This EAT determination is interesting as it highlights factors which will be considered when deciding on proportionality issues. The “age range” approach may also be useful. However, it should be remembered that this was a partnership situation rather than an employer/employee relationship.
What is proportionate so as to achieve a legitimate aim for a partner will not necessarily apply in cases of employment. In addition, a different decision could have been reached had the default retirement age been repealed at the time, as it has now been.
Employers would still be required to show that implementation of a mandatory retirement age is the only proportionate means of achieving their workplace objective and that this could not be achieved by any other means. This is likely to be difficult to show, and policies which were once proportionate could be unjustifiable once changes to the workforce or prevailing market conditions are taken into account.
This case has limited direct relevance for pension schemes, although employers should remember that the decision clarifies that the dismissal of an employee on the grounds of age alone will be difficult to justify.