Employment: Compulsory retirement at 65 and other landmark ruling

The UK’s highest court passes two landmark rulings on age discrimination.  In the first case, the Supreme Court rejected an appeal by the former senior partner of a law firm that he was forced to retire at 65.  The firm relied on its partnership agreement which required partners to retire at 65, justifying this as necessary for succession planning, allowing promotion opportunities for younger solicitors.

The claimant ceased to be a partner on 31 December 2006.  He brought a claim alleging, under the Age Regulations (which have since been repealed but substantially re-enacted under the Equality Act 2010) that his forced retirement was an act of direct age discrimination.  There was no dispute that the compulsory retirement age was direct age discrimination.  The issue was whether it could be justified as a proportionate means of achieving a legitimate aim.  The employment tribunal considered so and dismissed the case.  Mr Seldon appealed the case all the way to the Supreme Court.  The Supreme Court held that the law firm was entitled to set its own retirement age and considered that its objectives of allowing promotion opportunities for younger solicitors by succession planning were legitimate.

The influential judgment will be welcomed by employers looking at whether they can set their own retirement ages at a time when many older workers delay retirement because of shrinking pensions.  However, the judgment still leaves open the big question of whether 65 (or any other age) would be a justifiable retirement age across the board.  Whilst in Mr Seldon’s case, the firm may have been justified setting a retirement age for positions at the top of the firm on the grounds of succession planning, the Court would probably have come to a different conclusion if Mr Seldon had been a junior employee in a sedentary role.  Employers will have to consider the specific factors of each case.

A second highly significant age discrimination judgement was also published on 25 April.  The claimant, a former policeman who worked as a legal adviser for the Police National Legal Database, claimed that he was indirectly discriminated against because of new rules that employees needed a law degree to get on the highest pay grade.  The claimant was aged 62 at the time and had been due to retire at 65 making it impossible for him to gain any increase in pay from the degree before he retired.  The Supreme Court held that the pay rules constituted indirect discrimination.  The question of whether they were objectively justified was remitted back to the employment tribunal.  The case highlights a need to review benefits offered taking into account their value for older workers compared with younger workers.

Cases referred to: Seldon (Appellant) v Clarkson Wright and Jakes (A Partnership) (Respondent) and Homer (Appellant) 2012 v Chief Constable of West Yorkshire Police (Respondent) 2012

Judgements at http://www.supremecourt.gov.uk/decided-cases/index.html

Sarah Winter
Senior Solicitor 

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