Age discrimination ruling adds clarity on compulsory retirement

By: Jo Davis

Date: 17 May 2012

A landmark judgment by the Supreme Court has highlighted the issue of whether employers can justify plans to compulsorily retire someone.

The high-profile age discrimination case of Seldon v Clarkson Wright and Jakes (CWJ) on Wednesday 25 April sparked a good deal of media interest on radio and BBC TV.

The case concerned Leslie Seldon, a partner at a firm of solicitors in Kent, whom I represented at an Employment Tribunal. Leslie Seldon had appealed to the Supreme Court to be allowed to continue working after the age of 65. His case was taken on by the Equality and Human Rights Commission and by Age UK.

CWJ admitted that this was direct age discrimination but sought to justify its retirement policy on the basis that younger employees needed the opportunity to move up through the ranks, that it enabled the law firm to forward plan more easily and prevented the firm from having to remove older partners using more confrontational mechanisms, like performance reviews.

The EHRC & Age UK supported Mr Seldon's case as a means of seeking clarity as to the correct test for justification in direct age discrimination cases. The Supreme Court used the opportunity to outline for the first time the powers that employers have to force workers to retire. These include ensuring they have a legitimate social policy type aim — such as making way for younger employees — and the retirement is proportionate, ie appropriate and necessary. Whether it was proportionate in Mr Seldon's case will now revert to the Employment Tribunal to decide with the benefit of the Supreme Court's ruling.

I welcome the fact that the case has brought some clarity for employers in relation to the policies they need to have in place in order to compulsorily retire someone. However, whether it will be proportionate is something that will have to be looked at by each business individually.

It is quite a minefield and companies aren't really going to know until they are challenged whether or not they are going to succeed in showing someone's retirement was justified.

The Supreme Court has made it clear they will scrutinise businesses on a case-by-case basis. If a company's plans to retire someone can be justified as a legitimate aim, then the question is — could it be achieved in a less discriminatory way? For example, at 66 or 67 rather than 65.

It is about balancing the needs of older workers and younger ones who want to come up through the ranks. But this is not the end of the story for Mr Seldon.

Whilst remitting the specific case back to the Employment Tribunal for further consideration, Justice Hale concluded more generally that in order to justify a policy it is not sufficient for an employer to show that it has an aim which is capable of being a public interest aim; they need to show in addition that it is actually a legitimate aim in the particular circumstances of the employment and it is proportionate in the circumstances of the business at the time it is applied.

Jo Davis is head of employment law at Buckinghamshire-based B P Collins LLP.

What does the * mean?

If a link has a * this means it is an affiliate link. To find out more, see our FAQs.