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Retirement Age - The Final Chapter?

Retirement Age - The Final Chapter?

Jennifer Skeoch

Is it lawful for partnerships to impose a mandatory retirement age of 65? The answer in Mr Seldon’s particular scenario was yes, but this by no means should be seen by employers or partnerships as a green light to require employees or partners to leave at 65.

This case has received a lot of publicity over the years but to recap, Mr Seldon was a partner in Clarkson Wright & Jakes (CWJ), a law firm which operated a mandatory retirement age of 65 for its partners. When Mr Seldon’s retirement at that age was enforced by CWJ, he raised a complaint in the Employment Tribunal of age discrimination.

There was no question that the implementation of a mandatory retirement age constituted age discrimination. The crucial question was whether it could be justified in the circumstances. The key parts of CWJ’s justification argument were as follows:

  1. The partnership had identified legitimate aims of:
    a) retaining associates by giving them the opportunity of partnership after a reasonable period (the “Retention Aim”);
    b) facilitating planning of the partnership and workforce across individual departments by having realistic long term expectation as to when vacancies will arise (the “Planning Aim”); and
    c) limiting the need to expel partners by way of performance management thus contributing to a congenial and supportive culture in the firm (the “Collegiality Aim”).
  2. A mandatory retirement age of 65 was a proportionate means of achieving those aims.

Mr Seldon had been unsuccessful in his attempt to persuade the initial Employment Tribunal that heard his claim that CWJ's justification was fatally flawed. He appealed his case all the way to the Supreme Court, which rejected his appeal but did send the matter back to the Employment Tribunal to reconsider some key issues, particularly whether the specific age of 65 was proportionate.

In summary, the Employment Tribunal made the following findings:

  1. The Retention, Planning and Collegiality Aims were legitimate;
  2. A mandatory retirement age was a way of achieving these aims;
  3. 65 was a proportionate means (i.e. appropriate and reasonably necessary) of achieving the Retention and Planning Aims (the Collegiality Aim was left to the side for the purposes of this decision);
  4. The fact that a higher or lower age could have been agreed by the partners did not mean that the age selected (65) was not appropriate and reasonably necessary. A narrow range of ages would be proportionate, any one of which would achieve the Retention and Planning Aims.

The Tribunal was at pains to point out that the decision related to the specific circumstances of this case, so employers and partnerships should not rely on this decision as an endorsement for retaining a mandatory retirement age. Any organisation seeking to implement enforced retirement will need to think carefully about the aims it is seeking to achieve, and whether a retirement age is an appropriate and necessary way of securing those aims.

The critical question of “Which Age?” will need to be considered with extreme care if employers or partnerships decide to implement mandatory retirement ages. The Employment Tribunal in Mr Seldon’s case applied the law as it stood in 2006, so when considering whether 65 was acceptable, it took into account (among other factors) the default retirement age of 65 (now abolished) and the state pension age of 65 (changes to which are planned).

The Tribunal indicated that the decision may have been different if the case fell to be decided for the first time now. This should be seen as a strong message to any employers or partnerships that the justification bar is, today, much higher than it was before the abolition of the default retirement age and the proposed changes to the state pension age. That’s not to say that mandatory retirement can never be lawful; it’s simply a policy that would need to be carefully considered, weighing up the needs of the organisation against any harm caused by enforced retirement at a particular age.

Jennifer Skeoch
Senior Solicitor

LChalmers