Age Discrimination and Compulsory Retirement Ė Update
The Supreme Courtís recent judgement on the high profile Seldon v Clarkson Wright and Jakes case has provided some guidance on compulsory retirement but at the same time has left the important question of a reasonable age for retirement unanswered.
Leslie Seldon was a partner in a law firm. Under the terms of the firmís partnership deed he was required to retire at 65. He challenged this on the basis of age discrimination and the case has since been through various courts right up to the Supreme Court.
The firm argued that its policy was a reasonable means of achieving the following aims:
(i) ensuring associates were given the opportunity of partnership after a reasonable period;
(ii) facilitating the planning of the partnership and workforce by having a realistic long term expectation as to when vacancies would arise; and
(iii) limiting the need to expel partners by performance management, contributing to the congenial and supportive culture in the Firm.
The Supreme Court agreed, holding that the firmís policy met the public policy objectives outlined in previous European cases. However in doing so the Court also established that these objectives were wide-ranging and would be narrowly interpreted.
Having established that the firmís aims were legitimate, the Court then turned its attention to whether a compulsory retirement age of 65 was appropriate, necessary, and proportionate. Frustratingly, this particular issue has been returned to the Employment Appeal Tribunal for consideration.
So while we need to wait for the final outcome, it is clear that in limited circumstances it can be legitimate to adopt a compulsory retirement age. In order to do so employers will need to be able to satisfy the courts that their policies meet the strict public policy objectives.
Although it may be tempting to rely on this case to reinstate a recently abandoned retirement policy, there are very serious risks in doing so. The Seldon case had a very particular set of facts and must be read in the context of a negotiated agreement between members of professional firm.
For more information call Edward Garston on 01245 216100.