Professional firms that follow the traditional course of fixing a particular age at which their partners are given their gold watches and required to retire will be relieved to hear that the practice does not fall foul of the ban on age discrimination.
In the closely watched case of Seldon v Clarkson Wright & Jakes, the former managing partner of a law firm launched proceedings after he was required to retire at 65. His case had progressed all the way to the Supreme Court, which found that the firm’s practice was justified by the desirability of retaining associate partners, reasonable workforce planning and its wish to avoid challenging ageing partners over declining performance.
The sole question left open was whether the firm’s compulsory retirement age could lawfully be fixed at 65, rather than some higher age – say 68 or 70 – which would be perceived as less discriminatory. In rejecting the ex-partner’s case on that issue, the Employment Appeal Tribunal (EAT) found that the firm’s choice of 65 was sensible and proportionate.
The EAT ruled, consistently with decisions already reached by the superior courts, that the firm was pursuing legitimate aims when it required the man to retire. It was also relevant that he had consented to leave his post at 65 when he signed his partnership agreement and it had been legitimate for the firm to take into account the fact that the state retirement age was 65.
This decision is good news for employers that have held onto mandatory retirement ages but it is important to remember that every case turns on its own facts. Of particular significance to the EAT’s decision was the fact that at the time of Mr Seldon’s dismissal the state pension age was still 65 and there was a statutory default retirement age of 65 for employees (although not for partners). It remains the case therefore that employers wishing to use a mandatory retirement age must think very carefully about whether they can objectively justify it and look at the facts that apply to their own businesses.