A Partner in a law firm who was compulsorily retired at age 65 under the terms of the firm’s Partnership agreement will this week have his age discrimination complaint heard by the Supreme Court – the highest level of appeal in the United Kingdom.
Seldon v Clarkson Wright & Jakes has already been through three levels of Judges, from the Employment Tribunal to the EAT and then to the Court of Appeal. The near unanimous decisions throughout have been that although the compulsory retirement of Mr Seldon was an act of direct age discrimination, such discrimination could be objectively justified. In other words, it was ruled that the firm’s actions were a proportionate means of achieving its legitimate business aims, being:
(a) the need to ensure that associate solicitors were given the opportunity of partnership after a reasonable period;
(b) facilitating the planning of the partnership and workforce by having a realistic long-term expectation of when vacancies would arise; and (to a lesser extent)
(c) avoiding the damage which would be caused to a partnership’s “collegiate atmosphere” if the only way to get rid of older partners were via the capability or performance procedures.
However, since the repeal of the statutory retirement age in April last year Abolition of default retirement age : Employment Law Worldview : International Labor & Employment Lawyers & Attorneys: Squire Sanders & Dempsey Law Firm, it is questionable whether the same decision would be reached, at least in terms of the appropriateness of the age chosen. Perhaps more important now is whether the same legitimate aims could be used to justify a contractual retirement age for employees generally, not just law firm partners. After all, those three considerations would seem to apply to most businesses to some extent.
There have been a number of European Court of Justice decisions regarding the lawfulness of State retirement ages (most recently Fuchs v Land Hessen, ECJ), which have confirmed that matters such as encouraging the retention and promotion of younger employees and (more controversially) avoiding possible performance disputes with older employees, do constitute legitimate aims, which can objectively justify a national retirement age. However, these cases do not apply to UK private sector employers wishing to set their own contractual retirement age, and cannot therefore be relied upon with any great degree of confidence.
Instead, it appears that the vast majority of UK employers have chosen to scrap their contractual retirement age, with some surveys indicating that only 3% of large firms intend to retain one. Whether or not the Supreme Court’s decision has any impact on this remains to be seen.