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Employment tribunal supports fixed retirement ages in professional firms

30 May 2013

Last year the Supreme Court considered the case of Mr Seldon, who was a partner in a law firm. He had been forced to retire at the age of 65 (in accordance with the firm’s partnership agreement) and brought a claim of age discrimination against the firm.

The Supreme Court held that succession planning and ‘collegiality’ (i.e. maintaining a culture whereby partners did not have to be performance-managed out at the end of their careers), were capable of being legitimate aims. However, it did not decide whether they were in fact legitimate aims in the law firm’s case, or whether a retirement age of 65 was a proportionate way of achieving those aims, instead leaving the employment tribunal to consider such matters, and whether another age such as 68 or 70 should have been adopted.

The tribunal has, this week, vindicated the law firm. It has held that retention and planning, and collegiality (with some reservations) were legitimate aims, and that a compulsory retirement age achieved them. Importantly, it held that a mandatory retirement of 65 was a proportionate means of achieving those aims.

It is important to note that this does not give carte blanche to having 65 as a compulsory retirement age. The question of whether a fixed retirement age is justified will depend on the nature and circumstances of the employer’s business. What is appropriate in a professional firm might not be appropriate in a manufacturing company, and a smaller organisation might find it easier to justify a fixed retirement age than a larger one. Furthermore the approach might well be different for different categories of staff. Detailed evidence about matters such as age profiles, promotion prospects, staff turnover and strategic plans will be required in order to justify a fixed retirement age. Furthermore, the facts of this case date back to 2006, before the national retirement age was abolished. Many more people now work beyond the age of 65 and, therefore, if the tribunal were to consider the same case on facts arising today, it might decide that 68 or 70 was more appropriate, or indeed no retirement age at all.

Although this case gives a useful insight into how employment tribunals might approach the issue, it also confirms the importance of giving careful thought, with the benefit of professional advice, as to why you might want a fixed retirement age in the first place, and how it might be justified if challenged. It is also a useful reminder that partners, as well as employees, have the benefit of protection against age discrimination.

Please contact our employment law team if we can advise you on employment issues you may be faced with.

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Matthew Clayton MA LLM (Cantab), CIPP/E
Partner
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Mathew Clayton
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