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8

Aug 2013

Forcing retirement and age discrimination

An employment tribunal has found that a law firm that had imposed a mandatory retirement age of 65 on its partners was objectively justified in doing so, and this did not amount to direct age discrimination.


Mr Seldon issued proceedings against Kent-based firm, Clarkson Wright & Jakes (CWJ) in March 2007, claiming that his forced retirement at the age of 65 was an act of direct age discrimination and that the firm’s subsequent decision to withdraw the offer of an ex gratia payment was an act of victimisation. This case has attracted much publicity through its travels from the Employment Tribunal in 2008 to the Employment Appeals Tribunal in 2009, the Court of Appeal in 2010 and arriving in the Supreme Court in 2012.


The Supreme Court previously held that the firm had identified three legitimate aims for its decision to expel the claimant, Mr Seldon, from its partnership: retention, planning and collegiality.


In terms of retention the firm claimed that one aim underpinning the compulsory retirement age was the need to retain associates who would be encouraged to stay by the creation of regular vacancies within the partnership. The inter-related aim of planning was also cited as the firm maintained that a compulsory retirement age facilitated the planning of the partnership and workforce more generally. The Tribunal found that both of these aims were justified. The third legitimate aim – collegiality - was not pursued by the firm on remission.


However, this does not mean that companies with the same legitimate retention and planning aims will always be able to justify compulsory retirement ages. The merit of any justification defence is highly fact specific and if there is a less discriminatory alternative to the discriminatory measure in question the justification defence will fail. Alternative arrangements to be considered might include fixed-term partnerships so as to create regular vacancies within the partnership and robust performance management structures to remove under-performing partners and ensure that talented associates are promoted.


The Tribunal in Seldon also went on to conclude that an age of 65 for compulsory retirement could be justified. In reaching its conclusion on the facts, the Tribunal was primarily influenced by the fact that the partners, including Mr Seldon, had agreed to a compulsory retirement age of 65 the year before Mr Seldon was expelled, and that they were in an equal bargaining position. This calls into questions how far respondents will be able to rely on consent to a compulsory retirement age in a contract of employment which is the product of individual, rather than collective, bargaining where there may not be equal power.


The Tribunal pointed out that there might have been a different outcome had Mr Seldon reached retirement after the abolition of the statutory Default Retirement Age (DRA), as the fact that the DRA also happened to be 65 influenced the Supreme Court judges' assessment of the justification of that choice of retirement age. For further information please David Hacker.

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