What a performance

Seldon v Clarkson, Wright & Jakes

The age regulations allow employers to discriminate (both directly and indirectly) against employees if they can show it was a proportionate means of achieving a legitimate aim. In Seldon v Clarkson, Wright & Jakes, the Employment Appeal Tribunal (EAT) said that a firm of solicitors could not justify a compulsory retirement age of 65 by relying on a stereotype that performance tended to decline around that age.

Basic facts

Mr Seldon joined Clarkson Wright & Jakes as a solicitor in 1971 and was appointed an equity partner the following year. He was a signatory to a deed of partnership on 19 March 1992 which provided, among other things, for the compulsory retirement of partners on the 31st December following their 65th birthday. The deed made no provision for expelling underperforming partners.

In mid 2005 Mr Seldon started winding down his practice and he ceased to be an equity partner on 31 December 2006. He brought a claim of direct age discrimination under regulation 17 of the age regulations which covers workers who are not employees, as well as employees. The firm argued that the compulsory retirement age was objectively justified.

Relevant law

Regulation 17 states that it is unlawful for firms to discriminate against a partner

(i) in the way they afford him access to any benefits or by refusing to afford, or deliberately not affording, him access to them; or

(ii) by expelling him from that position, or subjecting him to any other detriment."

Tribunal decision

The tribunal agreed with Mr Seldon that the compulsory retirement age was directly discriminatory, but concluded that the firm had a number of legitimate aims that could justify it.

These included: ensuring that associate solicitors had a reasonable chance of becoming partners to encourage them not to leave; facilitating long term planning about when vacancies would arise; and limiting the need to expel underperforming partners in order to contribute “to the congenial and supportive culture in the firm”.

Mr Seldon appealed.

EAT decision

And the EAT upheld his appeal.

It said that although the tribunal was right that the firm had a number of legitimate aims for justifying its compulsory retirement age, it had been wrong to assume that the performance of partners would “drop off” once they got to 65. This, it said, was an unjustified and stereotyped assumption.

As there was no evidence to support this stereotype, the firm could not justify its compulsory retirement age. The EAT acknowledged that it had been fixed at the age at which employees can be made to retire under domestic law, “but that provision is adopted for national labour market considerations rather than because performance is deemed to diminish at that stage”.

The EAT therefore remitted the case back to the tribunal to consider whether the first two objectives (on their own or in conjunction with the objective of creating a “congenial and supportive culture”) could justify the compulsory retirement age. It commented that although the firm could not rely on the law allowing for the retirement of employees at 65, it said that the tribunal was certainly entitled to take it into consideration.

The EAT also made clear that employers did not have to have consciously considered whether they could justify what they were doing at the time they carried out the alleged act of discrimination.

Finally, it said that the test for justifying direct discrimination should not be any different to the test for indirect discrimination. Nor did it accept that direct discrimination could only be justified very occasionally. Although that might be how it worked out in practice, tribunals must still apply the normal principles of legitimate aim and proportionality.