Unlike other discrimination legislation, the age regulations 2006 (now part of the Equality Act 2010) allows employers to justify direct age discrimination. In Seldon v Clarkson Wright and Jakes (a partnership), the Supreme Court ruled that it can only be justified if the employer can show that their aim had a legitimate objective of a “public interest nature”, which could be distinguished from purely individual reasons.
Mr Seldon, a partner at Clarkson, Wright and Jakes, was forced to retire at the end of the year following his 65th birthday, in accordance with a term in the firm’s partnership agreement.
He asked to stay on but the partners refused, saying that his proposal could not be justified on the basis of business need. Mr Seldon brought a claim for unlawful direct age discrimination.
Decision of lower courts
Although the Tribunal concluded that Mr Seldon had suffered less favourable treatment as a consequence of his age, it said the treatment was justified as the clause had three legitimate aims:
- to ensure associates were promoted to partner after a reasonable period so that they didn’t leave
- to facilitate workforce planning by knowing when vacancies would arise
- to limit the need to expel partners for underperformance and so promote a congenial atmosphere.
The EAT held that while staff retention and workforce planning could be met by any fixed retirement age there was no evidential basis for assuming that performance would drop off at 65. As it was not sure justification could be made out by reference to the other two aims alone, it remitted the case back to the Tribunal to determine whether the legitimate aims could have been reached by a different retirement age.
The Court of Appeal rejected Mr Seldon’s appeal and the Supreme Court was asked to decide:
- whether any or all of the three aims amounted to legitimate aims justifying direct age discrimination
- whether the firm had not only to justify the retirement clause generally but also their application of it in the individual case, and
- whether the retirement clause was a proportionate means of achieving a legitimate aim
Supreme Court decision
The Supreme Court said that it was now clear, following a number of European cases subsequent to the Tribunal decision, that the test for justifying direct age discrimination was different than for indirect discrimination.
Under the age regulations (now the Equality Act) direct discrimination could only be justified by employers if they could show that their aim had a legitimate objective of a “public interest nature”, which was consistent with the social policy aims of the state as opposed to purely business interests, such as cost reduction or improving competitiveness.
The Supreme Court said that two legitimate social policy aims identified by the European Court - inter-generational fairness and preserving the dignity of older workers – applied in this case. Staff retention and workforce planning were directly related to the social policy aim of sharing out professional employment opportunities fairly between the generations; while limiting the need to expel partners by way of performance management was directly related to the “dignity” aim.
However, employers still had to prove the aim was legitimate in the circumstances. For example, improving recruitment of young people would be a legitimate aim but only if the employer had a problem recruiting young people.
The next stage was to determine whether the means used was proportionate. The Supreme Court therefore remitted the case to the Tribunal to decide whether the choice of a mandatory age of 65 was a proportionate means of achieving the legitimate aims of the partnership.
This case provides useful guidance as to what amounts to a legitimate aim in cases of direct age discrimination and clarifies that the test of justification is narrower than that for indirect age discrimination.