Unlike other discrimination legislation, the age regulations 2006 (now part of the Equality Act 2010) allow employers to justify direct age discrimination if they can show that it was “a proportionate means of achieving a legitimate aim”. In Seldon v Clarkson Wright and Jakes, the Employment Appeal Tribunal (EAT) held that it was entirely appropriate for tribunals to stipulate a specific retirement age in order to meet the legitimate aims of the employer.
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 other partners refused.
History of claims and appeals
The tribunal dismissed his claim for unlawful direct age discrimination. Although he had suffered less favourable treatment, it held that the clause was justified because it promoted staff retention and workforce planning. It also limited the need to expel partners for underperformance thereby promoting “congeniality”. The EAT agreed with the first two aims but held that there was no evidential basis for assuming that performance would drop off at 65.
The Court of Appeal rejected his appeal and the Supreme Court (see weekly LELR 273) remitted the case to the tribunal to decide if the choice of a mandatory age of 65 was a proportionate means of achieving the legitimate aims of the partnership. It held that although the partners could have selected a different age for retirement within a narrow range of between 64 to 66, 65 could be justified as this was the age that the partners had agreed and the default retirement age at the time was 65.
Mr Seldon appealed again on the basis that if the firm’s aims could have been achieved with a different retirement age, then 68 or 70 would have served just as well as 65 and would be less discriminatory.
The EAT dismissed the appeal on the basis that the tribunal was entitled to conclude that 65 was an appropriate age. The fact that it could have identified a slightly later age within very much the same age range did not constitute an error of law.
If Mr Seldon’s arguments were taken to their logical conclusion, even a day later than a stipulated age would be less discriminatory, and it would therefore be wrong in law not to take that day as the date for retirement. And if a day later still, the same would apply. However, that would mean that no date could be chosen lawfully because any date would be unlawful if a slightly later date would serve just as well.
The earlier judgments of the Court of Appeal and Supreme Court in this case made clear that it was entirely appropriate to stipulate a specific retirement age in order to meet the legitimate aims of the partnership. That meant that the tribunal had to balance the discriminatory effect of choosing a particular age on Mr Seldon (although others in the partnership might benefit from it) against the likelihood of achieving the legitimate aim. That exercise would not necessarily show that a particular point could be identified as any more or less appropriate than any other point. The tribunal had to do what was “reasonably necessary” in the circumstances, given the realities of setting any particular “bright line” date.
This decision may seem somewhat harsh coming from judges who face a mandatory retirement age of 70. However, what it does show is that if employers have legitimate aims (and the claimant agreed the aims of workforce planning and retention were legitimate), then provided the age chosen is within a reasonable spectrum, then the employer’s defence will succeed. What perhaps did not help the claimant here and was noted by the Judge was the fact that all partners including the claimant had agreed to the retirement age when entering the partnership.