Skip to navigation
The Supreme Court has today (25 April) rejected an appeal from Mr Leslie Seldon, backed by the Equality Human Rights Commission, in challenging the decision of law firm, Clarkson Wright & Jakes where he was a partner, in requiring him to retire at the age of 65. Rachel Dineley, Employment Partner and Head of the Equality Discrimination Unit at DAC Beachcroft, said: “This long-awaited decision deserves careful consideration, not only from professional services firms and other partnership, but all employers who need to justify any prospectively age-discriminatory practice." “When this case first commenced, it was less significant because employers were able to rely on the so called “default retirement age”, which enabled them to require employees to retire at age 65 or more. However, following the abolition of the DRA in 2011, this leading decision is important to all organisations. It demonstrates the tricky balancing exercise which has to be undertaken when meeting important business needs on the one hand, while avoiding undue discrimination on the other. “The objective justification test came under close scrutiny by Baroness Hale (with whom the other four Lords agreed) when looking at the basis upon which requiring Mr Seldon to retire could be objectively justified. While the test (which entails showing the practice adopted is a proportionate means of achieving a legitimate aim) was not in doubt, how to satisfy the test in practice has been the important and tricky issue. “While there can never be a “one size fits all” approach to this test, the Supreme Court has given broad but clear guidance as to the steps that have to be taken, and the evidence which has to be produced, to meet it. The test entails showing that the:- the business’ aim is capable of being legitimate under European law and national legislation - it is legitimate in the particular circumstances and is in fact being pursued; and - the means adopted are both appropriate and necessary. “So, for example, if an organisation has an effective performance management regime, it may not be legitimate to avoid it in relation to a particular group, such as those approaching retirement age. In deciding that the means chosen is appropriate and necessary, it is essential not to make assumptions or just to go for the easy or obvious option without looking at feasible alternatives”. Mr Seldon had failed, from the outset, to persuade the Employment Tribunal and thereafter the Employment Appeals Tribunal and the Court of Appeal, that his enforced retirement was unlawful. Mr Seldon had agreed, under the terms of his firm’s partnership deed, to retire at 65 and the Employment Tribunal had found that these retirement arrangements met the legitimate aims of: · - ensuring associates were given the opportunity of partnership after a reasonable time; - facilitating the partnership and workforce planning, with realistic expectations as to when vacancies would arise; and - limiting the need to expel partners by way of performance management, thus contributing to the congenial and supportive culture of the firm. By the time the case reached the Court of Appeal in July 2010, it was of sufficient significance that the Department of Business Innovation and Skills was also represented (as an “intervener”). The new coalition government was, by then, committed to reviewing and prospectively abolishing the default retirement age for employees. The Court of Appeal made clear that these three aims were indeed legitimate. Moreover, a legitimate aim can change over time. The fact that the age-related practice complained of has been the subject of agreement may also be relevant. The Supreme Court undertook a full review of relevant European law and made the important distinction between direct and indirect age discrimination when applying the test under the relevant European Directive. If it is sought to justify direct age discrimination, the aims must be social policy objectives, such as those related to employment policy, the labour market or vocational training. These are of a public interest nature, which is distinguishable from purely individual reasons which are particular to the employer’s situation, such as cost reduction or improving competitiveness. European law showed that there were two broad categories that were relevant here: the aims of intergenerational fairness (the first two relied on by the firm) and preserving the dignity of older workers (the third aim, in the Seldon case). The aims, accepted by the Employment Tribunal, were consistent with European law. The second key issue was whether the treatment of Mr Seldon was justified in his particular case. The Supreme Court recognised that where it is justified to have a general rule, then the existence of that rule will usually justify the treatment that results from it. It was noted that requiring the rule to be specifically justified in relation to the individual would negate the purpose of having a rule in the first place. That said, employers will still have to give very careful consideration to what if any compulsory retirement rules can be justified in their particular organisation. The case was sent back to the Employment Tribunal to consider whether the choice of a mandatory age of 65 was a proportionate means of achieving the legitimate aims of the partnership in this instance.