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Court of Appeal rejects former partner's age discrimination claim

28 July 2010

A former partner forced to leave his law firm at 65 has lost his appeal that the partnership terms constituted unlawful age discrimination.

The Age Regulations, which implement the EU’s equal treatment directive 2000/78, ban age discrimination unless there are justifications based on legitimate aims.

Leslie Seldon, former senior partner at Clarkson Wright and Jakes, in Kent, argued in the employment tribunal that partnership rules at his old firm failed the 'legitimate aims' test.

The tribunal, and later the Employment Appeal Tribunal, accepted the firm's defence that the rules ensured that associates were given the opportunity of partnership after a reasonable period and helped manage the development of the partnership.

Upholding the findings, Sir Mark Waller held in Seldon v Clarkson Wright and Jakes [2010] EWCA Civ 899 that a compulsory cut-off retirement age could be justified so that “people will be allowed to retire with dignity”.

“To have such a policy requires a cut-off age which some when they reach it will think too low but it does not follow that it is not justified to have a cut off age,” he said.

The ruling comes after the High Court’s decision in the Heyday case, which validated the argument that derogations from the ban on age discrimination could be lawful if they were “justified by legitimate social policy objectives, such as those related to employment policy, the labour market or vocational training”.

The Court of Appeal rejected Leslie Seldon’s contention that this did not apply to partnerships, saying that compulsory retirement clauses in partnership agreements were lawful provided they were consistent with the UK’s social policy justification for the derogations.

Sir Mark upheld a further “collegiality” argument that forced retirement meant firms did not have to manage ageing partners out of the partnership on ground of performance, “therefore contributing to the congenial and supportive culture in the firm”.

“It seems to me that an aim intended to produce a happy work place has to be within or consistent with the government’s social policy justification for the regulations. It is not just within partnerships that it may be thought better to have a cut-off age rather than force an assessment of a person’s falling off in performance as they get older,” he said.

Following rulings in cases such as Heyday and Palacios de la Villa, the Court of Appeal decision in Seldon suggests that there is broad scope for justification of a mandatory retirement age.

“The aim being fulfilled can be any legitimate aim and not merely the specific social policy aims mentioned in the EU directive,” according to Sue Ashtiany, of special counsel at Nabarros.

“The court also took into account the special situation of partners who had equal bargaining power, and the fact that the age chosen is the same as the default age for employees,” she said.

A point of more general interest is the court’s refusal of to entertain the argument that the firm should have settled on a less discriminatory higher age.

“In many discrimination cases, it would be a real issue to see whether a different approach would be less discriminatory and this is an important element in determining proportionality,” Ashtiany continued.

“However, Laws LJ in the EAT pointed out that any other age would be discriminatory, almost by definition for the people of that age and that therefore you would never be able to justify a default retirement age which was of course permitted or mandated by the directive. And this would lead to further uncertainty if the default retirement age was removed.”

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Discrimination Divorce Conveyancing