Seldon and the Issue of Retirement

Much is being made of the recent Supreme Court decision in the case of Seldon v Clarkson Wright and Jakes as many commentators believe that it paves the way for the re-introduction of a default retirement age.  I am not so sure.

Mr Seldon qualified as a solicitor in 1969 and joined the Respondent firm in 1971.  He became an equity partner in 1972.  A term of the Partnership Deed was that all partners must retire at the end of the year in which they reached the age of 65 and Mr Seldon was retired automatically at the end of December 2006.  The Employment (Equality) Age Regulations came into force on 1 October 2006 and therefore Mr Seldon commenced proceedings, arguing that his explusion from the partnership was an act of direct age discrimination.   It is important to note that Mr Seldon was able to pursue his claim on the basis that he was a partner and not an employee as until the abolition of the default retirement age in employment, it was lawful to retire employees at 65.  It is also important to remember that even direct age discrimination can be justified if the act complained of is a proportionate means of achieving a legitimate aim.

The Supreme Court considered carefully the six aims which were put forward by the partnership as justification for their requirement that equity partners must retire at 65 and held that, in fact, only three of them were legitimate from a social policy and not just an individual business perspective:

1.  staff retention

2.  workforce planning

3.  allowing an older, less capable partner to leave without the need to justify his departure on performance grounds which would damage his dignity

The Court also held that requiring a partner to retire would be a proportionate means of achieving these aims.  However, the case has been remitted to the Employment Tribunal to consider whether the choice of a mandatory age of 65 was, in fact, a proportionate means of achieving the legitimate aims which were set out by the Partnership.  It will, in my view, be more interesting to see the outcome of that hearing.  The ultimate findings of the Tribunal in this case will effectively determine whether a default retirement age can be reintroduced through the back door. 

In my view, it will be extremely difficult for an employer to choose a specific retirement age, even if it has legitimate aims such as those put forward in this case.   Why 65?  Why not 64 or 66?   And if a particular age can be justified now, will that age remain static as the population ages or will companies be required to review any retirement ages, say every 5 years or so?  I, for one, am looking forward to seeing the final outcome of the Seldon case but until then my advice to employers will continue to be that they should not have a default retirement age at all.

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About Belinda Lester
I am the managing director and founder of Lionshead Law a specialist employment law and HR consultancy company.

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