Compulsory retirement age

The long awaited Supreme Court judgment has been handed down today in the case of Seldon v Clarkson Wright and Jakes (a Partnership).

The following are the key facts from the case:

  • Mr Seldon was a partner at the Respondent firm of solicitors and was subject to a partnership deed which provided for partners retiring at the age of 65. 
  • Mr Seldon realised he needed to work beyond the retirement age but was refused permission on the basis that there was no business need. 
  • Mr Seldon brought a claim for direct age discrimination and victimisation.
  • The Respondents argued that (1) giving senior non-partner solicitors an opportunity of partnership within a reasonable time, (2) facilitating workforce planning and (3) limiting the need to expel underperforming partners were all legitimate aims which justified the retirement age. 

Decision

The Supreme Court held that the compulsory retirement age of 65 was a direct age discriminatory measure but that it was capable of justification as the two broad aims of inter-generational fairness and preserving dignity of older workers had been met.  The Respondent’s aims of staff retention and workforce planning fell within the inter-generational fairness head and limiting the need to expel underperforming partners fell within the ‘dignity’ aim. 

The case has been remitted to the Employment Tribunal to decide whether the selection of the specific age of 65 was a proportionate means of achieving the aims. 

The Supreme Court also held that the test for justifying direct age discrimination is narrower than the test for indirect age discrimination.  A test for justifying direct age discrimination has now emerged:

  • The aim in question must have legitimate objectives of a general public interest nature, which is different to purely individual aims which might apply to a particular business.
  • The aim must be legitimate in the particular circumstances.
  • The means used to achieve the aim must be appropriate and necessary.

Key point

Employers should be mindful that any compulsory retirement age could be challenged and that they would need to be able to (1) justify it on the basis of having a public interest aim and (2) show that it is a legitimate aim in the particular circumstances of the case.

Age discrimination – requirement of a degree

The Supreme Court also handed down its judgment in the case of Homer v Chief Constable of West Yorkshire Police.  This case concerned the scope of indirect age discrimination.

The key facts are as follows:

  • Mr Homer began working for the Police National Legal Database at the age of 51.  He did not have a law degree and he was not required to do so for the role. 
  • A new grading system was introduced, in which there were three promotion thresholds. 
  • Mr Homer met the first two thresholds but he did not meet the third threshold as he did not have a degree. 
  • In order to meet the third threshold he would have had to embark on a 4 year part time law degree which would have taken him beyond the age of 65 to complete. 
  • He was required to retire at the age of 65 (pre abolition of default retirement age).
  • Mr Homer brought an indirect age discrimination claim.  He argued that he was subject to a provision, criterion or practice which put persons of his age group at a disadvantage.
  • The EAT and Court of Appeal disagreed and found that it was his impending retirement which put him at a disadvantage, not his age.  They found all people approaching the end of their employment would be treated the same.

Decision

The Supreme Court held a different view.  The Court found that age was related to retirement (no surprises there) and that leaving employment for any other reason was not comparable.

The case has been remitted to an Employment Tribunal to see whether the discrimination could be justified.  The Court did comment that the legal test to justify indirect discrimination was easier that the legal test to justify direct discrimination.

Key point

Employers should tread carefully when treating an employee differently on the basis of retirement.  This case demonstrates that it is relatively easy to establish indirect age discrimination when looking at retirement.  Employers need to be mindful that they may need to justify any action taken.