Compulsory Retirement Age - the Seldon Case

At long last, the Employment Appeal Tribunal ("EAT") has clarified the position regarding partners and mandatory retirement in the notorious case of Seldon v Clarkson Wright & Jakes, upholding an employment tribunal's ("ET") decision that a mandatory retirement age of 65 for partners in a law firm was a "proportionate means of achieving the legitimate aims" of workforce planning and staff retention.

Unlike other forms of direct discrimination, direct age discrimination might be objectively justified. However, the exception allowing employers to retire employees at a default retirement age of 65 or over was repealed in April 2011, meaning that the compulsory retirement now amounts to direct age discrimination unless objectively justified. The exception did not apply to partnerships and this issue was addressed in the Seldon case.

Background

Mr Seldon, a partner at respected firm of solicitors Clarkson Wright & Jakes ("CWJ"), brought a claim of age discrimination when he was forced to retire at age 65 under CWJ's mandatory retirement rules.

ET Decision

The ET dismissed Mr Seldon's claim, holding that the retirement age was a proportionate means of achieving the three legitimate aims of retention, planning and collegiality within the meaning of the Age Regulations.

EAT Decision

Mr Seldon appealed this decision and the EAT decided that although the ET was able find that a particular mandatory retirement age achieved legitimate aims, no evidence was produced to support CWJ's position that 65 was a proportionate means of achieving the collegiality aim.

Supreme Court Decision

In 2013 the Supreme Court rejected Mr Seldon's argument that CWJ's aims were not legitimate within the meaning of Article 6 of the Equal Treatment Framework Directive. The Supreme Court remitted the claim back to the ET to consider whether 65 was an appropriate mandatory retirement age, or whether 68 or 70, for example, were more appropriate.

Round 2 - Employment Tribunal

The ET found in favour of CWJ, holding that the three aims were legitimate aims, and that mandatory retirement ages achieved these aims. Moreover, the ET found that 65 was a proportionate means of achieving the three aims.

It is important, however, to note that the ET did consider factors specific to CWJ e.g. all partners (including Mr Seldon) had consented to the retirement age. Moreover, in order to achieve the aims of retention and planning in a proportionate way, the retirement age had to be carefully calculated to not be so low as to:

a) Cause partners retiring before their career ended to continue to practice elsewhere;
b) Make associates worry that the duration of partnership would not meet their expectations; or
c) Cause partners concerns that there might be insufficient time for them to make sufficient provision for retirement.

Furthermore, the age could not be so high as to discourage associates who might leave and join a firm with more immediate chances of partnership. Consequently, the narrow range of ages e.g. 64 to 66 could achieve the necessary balance.

Final Outcome - Employment Appeal Tribunal

Mr Seldon again appealed the decision, arguing that a measure cannot be appropriate if the aims could have been achieved with a less discriminatory impact and that the ET should not have used a "range of reasonable responses" test.

However, the EAT found that the key was whether the measure was "reasonably necessary" and the ET had been entitled to conclude 65 was reasonable.

Consequences of the decision

Tribunals will need to consider the balance between a discriminatory effect of a retirement age and the success in achieving the aims.

Crucially, the default retirement age at the time was 65, but as this has been subsequently repealed there could have been a different outcome of Seldon had Mr Seldon retired after this date.

Employers should not assume that the decision in Seldon has provided a free rein to introduce mandatory retirement ages and must consider the balance between the needs of the business and the individual. If you would like further information on this article, or should you require further advice on retirement and compulsory retirement ages, please contact Stephen Moore.