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Mandatory Retirement Ages – Seldon v Clarkson Wright and Jakes [2012] UKSC 16

Published 22 May 2012

At the end of April 2012 the Supreme Court handed down its judgments in two conjoined appeals, Seldon v Clarkson Wright and Jakes [2012] UKSC 16and Homer v Chief Constable of West Yorkshire Police [2012] UKSC 15.  Both cases concerned age discrimination; Seldon focuses on justifying direct age discrimination and Homer on indirect age discrimination.   This short case note addresses the decision in Seldon.

Factual background:
Mr Seldon was a partner in a firm of solicitors, Clarkson Wright and Jakes.  He had been a partner for over 30 years.  The partnership deed provided that partners who reached 65 years of age had to retire from the firm at the end of the following calendar year.  This provision was subject to any agreement by the partners to the contrary.  Mr Seldon turned 65 in January 2006 and therefore under the partnership deed had to retire by December 2006.  Mr Seldon sought the approval of the other partners to continue to be a partner after he attained the age of 65.  This request was rejected by the other partners as there was no business need for him to extend his tenure as a partner.
Following the coming into force of The Employment Equality (Age) Regulations 2006 in October 2006 Mr Seldon commenced proceedings alleging that the mandatory retirement age was direct discrimination.
In the proceedings, there was no doubt that the provision in the partnership deed treated Mr Seldon less favourably than the other partners because of his age.  The issue for the Employment Tribunal was whether this could be justified as “proportionate means of achieving a legitimate aim” (under Regulation 3); they found it was.
The two issues on appeal for the Supreme Court to consider were:

1)      Whether the Employment Tribunal was right to conflate the tests for direct and indirect discrimination;

2)      Whether the discriminatory treatment had to be justified in relation to both the firm generally and in particular in its application to Mr Seldon.

The Supreme Court’s decision:

The Supreme Court unanimously dismissed the appeal and remitted the matter to the Employment Tribunal to resolve the outstanding issue.  The leading judgment was given by Lady Hale JSC; the rest of the court agreed, with Lord Hope JSC adding a few comments.
Lady Hale’s judgment provides a helpful summary of the relevant European jurisprudence before proceeding to the relevant questions in the instantcase (see paragraph [50] of her judgment).

First question:

In relation to the first question, her Ladyship stated that the jurisprudence since the original Employment Tribunal decision illustrates that there is a distinction between the test for justification in relation to direct and indirect discrimination.  The conjoined appeal of Homer addressed this point.
The law allows employers to choose which aims their retirement policies will pursue.  Such polices have to fit the following criteria:

i)        They have to be policies that are set for public interest reasons;

ii)       They need to be consistent with the UK’s social policy objectives;

iii)     The means used to implement the policy need to be appropriate and necessary to achieve it.

Baroness Hale sets out in paragraph [50(4)] some of the acceptable social policy objectives employers may pursue.  These include: promoting access to employment for younger people and the departure and recruitment of staff.  Her Ladyship summarises the two strands of legitimate aims stemming from the European jurisprudence at paragraphs [56-57].  In summary, these are inter-generational fairness and preserving the dignity of older workers.  Inter-generational fairness concerns having opportunities for younger people to join the workforce, as well as ensuring a balanced workforce is maintained.  Dignity concerns protecting the dignity of older people who may under-perform and to avoid their potential humiliation in this regard.
The Supreme Court accepted that the aims of the firm’s policy were legitimate, meeting the inter-generational and dignity requirements.

The judgment makes it clear that once the aim of the policy has been indentified, the Tribunal need to be satisfied that it is a legitimate aim in the relevant context.  However, the aim need not have been expressed or even realised at the time the policy was adopted.  It is for the Tribunal to assess the reason(s) for the measure, what objective it seeks to pursue and then whether that is legitimate in the context (see paragraphs [59- 61]).  The Tribunal is then required to assess whether the means adopted by the employer are appropriate and necessary to achieve that aim.  In doing so the Tribunal must scrutinise the reason(s) and the particular business context, in order to assess whether the apparent aim could be achieved in a different and non-discriminatory manner.

Second question:

In relation to the second question, the Supreme Court noted that the Employment Tribunal had not actually considered whether the particular retirement age of 65 was justified in this particular context.  Baroness Hale noted that the legitimate aims pursued by the firm could be used to justify any specified retirement age.
Accordingly the Supreme Court directed the Employment Tribunal to re-consider whether the application of the specific age of 65 in relation to each of the objectives of the policy was a proportionate means of achieving the legitimate policy aims.  The issue remitted to the Employment Tribunal was therefore “whether the choice of a mandatory retirement age of 65 was a proportionate means of achieving the legitimate aims of the partnership?”
Baroness Hale did note in this regard, that where there was a general rule which was justified, it would often mean that any individual treatment pursuant to such a general rule would also be justified.
As Baroness Hale noted “all businesses will now have to give careful consideration to what, if any, mandatory retirement rules can be justified”.  Employers will need to explain, and provide justification for, why a particular retirement age has been specified.

Readers please note that The Employment Equality (Age) Regulations 2006 which were considered in this case have been repealed.  Their substance however is now re-enacted and contained within the Equality Act 2010.  

James Carter
Barrister

KCH Garden Square Chambers
Nottingham and Leicester
0115 941 8851/0116 298 7500

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