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Compulsory retirement justified in Seldon

Associates need to 'see a path towards equity partnership', tribunal says 

31 May 2013

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A six-year battle over whether former senior partner Leslie Seldon was discriminated against on grounds of age came to an end this week at an employment tribunal in Ashford.

Employment judge Salter held that a provision in the partnership deed of Kent firm Clarkson Wright & Jakes requiring partners to retire at the age of 65 was “justified in all the circumstances”.

Judge Salter said the position “may have been different” if Seldon had been asked to leave after abolition of the default retirement age and the planned changes to the state pension age.

However, the tribunal said it was “satisfied that the mandatory retirement age is appropriate and reasonably necessary” for the achievement of the aims of staff retention and planning the future of the firm.

Andrew Wright, managing partner of Clarkson Wright & Jakes, based in Orpington, said the tribunal had come to an “eminently sensible” decision.

“They clearly understood what they were asked to determine, in just the same way as they did six years ago,” Wright said.

He added that, despite the abolition of the default retirement age, the firm’s partnership deed “certainly maintained the retirement age of 65”.

Legitimate aims

In its original judgment in December 2007, the tribunal held that Seldon's compulsory retirement was not an act of unlawful age discrimination under the Employment Equality (Age) Regulations 2006.

The Supreme Court rejected Seldon's appeal last spring, but ruled that the tribunal had erred in applying the wrong justification test for direct age discrimination.

Lady Hale said she did not want to deny the tribunal the chance to discuss the age chosen alongside three of the firms’ aims that had been regarded as legitimate by the ECJ – ensuring associates had the chance to become partners, facilitating workforce planning and reducing the need to expel partners.

Delivering judgment in Seldon v Clarkson Wright & Jacques (case no. 1100275/2007), Judge Salter said there was no need for the tribunal to consider the ‘collegiality’ aim, as the firm had provided insufficient evidence that a retirement age of 65 was a proportionate means of achieving this.

On the aim of staff retention, he said this did not need to refer to salaried partnership.

Judge Salter said it was "the future retirement of equity partners that enabled associates to see a path towards equity partnership even if it meant they would be salaried partners for a time before being offered equity".

He said that a mandatory retirement age had to be a "balance between the interests of the practice, the partners and of associates who aspire to partnership. Any determination has to weigh up the needs of the partnership against the harm caused by the discriminatory treatment."

Impact on employers

Rachel Dineley, employment partner and head of the equality and discrimination unit at international law firm DAC Beachcroft, commented: “The tribunal’s decision is both expected and welcome. It will provide comfort to a wide range of businesses where, in appropriate circumstances, there is a clearly perceived need to impose a retirement age, notwithstanding the abolition of the default retirement age in 2011.” 

However, she warned that the decision does not provide employers with a ‘carte blanche’ to introduce their own retirement age in the absence of clear justification.

“What will be justifiable is contingent upon the employer establishing a legitimate aim or aims and demonstrating, both with tangible evidence and the application of common sense (but without stereotyping) that the retirement age is appropriate and reasonably necessary to achieve those aims.

“Partners in partnerships were never subject to the default retirement age under the 2006 Age Regulations and, subsequently, the Equality Act 2010. Partnerships, in particular, will want to examine the tribunal’s judgment to assess whether any retirement age stipulated in their partnership deed or membership agreement now needs to be revisited.

“Careful analysis of a wide range of factors, from the age profile of the partnership or membership, through to medium to long term business planning, will be necessary to assess and address the risks associated [with] imposing retirement at a specified age,” she concluded.

Daniel Barnett, employment law barrister at Outer Temple Chambers, commented: "The tribunal said that it was appropriate to have a mandatory retirement age to enable career progression for junior lawyers and, to a lesser extent, to avoid awkward conversations with ageing partners about deteriorating abilities.

"Societal norms about people working beyond 65 have moved on in the last seven years, and the tribunal specifically stated that the case might be decided differently if it was considering a retirement age today rather than in 2006."

 

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