News

A partnership (a law firm) did not discriminate against its senior partner, on grounds of age, by forcing him to retire. It succeeded in justifying its compulsory retirement age of 65.

(Decision by Ashford Employment Tribunal in Mr L J Seldon v Clarkson, Wright & Jakes [2007])

Implications

Good news for partnerships: although this is only a tribunal level decision it does indicate that tribunals are willing to uphold compulsory retirement ages in respect of partners and how such justification may be achieved. (However, as usual, each decision will turn on its own particular facts);

Helpful guidance in respect of employees: employers can currently rely on the statutory default retirement age of 65 when retiring employees (which does not apply to partners). However, if the Heyday challenge to this default retirement age is successful then employers are likely to need to justify a contractual retirement age.

Details

Mr Seldon (the Claimant) a former partner in law firm Clarkson Wright & Jakes (the Respondent) was required by his firm's partnership deed to retire at 65.

The Claimant brought a claim in the Employment Tribunal of direct age discrimination. The Respondent accepted that the Claimant's compulsory retirement was an act of less-favourable treatment on the grounds of age. However, it argued that such treatment could be justified as being 'a proportionate means of achieving a legitimate aim'.

The Tribunal agreed with the Respondent that its following aims were legitimate:

  • ensuring succession planning. i.e. that associates would be given the opportunity of partnership after a reasonable period;
  • avoiding the need to expel partners for performance management reasons; and
  • facilitating the planning of the partnership and workforce.

The Tribunal further considered that there was no reasonable alternative to compulsory retirement to meet the Respondent's above aims and therefore it was proportionate.

However, it is worth noting that in this case the Tribunal did not accept the Claimant's suggestion of performance management (and dismissal for poor performance) as an alternative to compulsory retirement. The main reason for this is that performance management would have an adverse effect upon the 'congenial and supportive' culture of the firm (which was small and only had ten partners).

It may well be that it would be more difficult for a larger firm, which is more readily prepared to use performance management, to persuade a Tribunal that compulsory retirement is justified. However, it would seem that performance management is a poor tool to deal with succession planning, given that many partners may well continue to excel into their 'old' age. It also potentially minimises the opportunity for partners to have a dignified exit from their business.