Retirement – To be retired, or not to be fired? That is the question.

The Default Retirement Age of 65 was repealed in 2011, having been introduced in 2006 when the concept of age discrimination was first introduced.  However, it can still be lawful for companies to force a retirement if it can be justified.  The long running case of Seldon v Clarkson Wright & Jakes was the front runner in resolving the question of what does ‘justified’ mean in that context and we have recently had the final piece of the jigsaw with the most recent Employment Appeal Tribunal (EAT) decision.

In the Seldon case, the claimant, Mr Seldon, was a partner in a firm of solicitors who was compelled to retire at the age of 65 under the provisions of the partnership deed.  He alleged that this was direct discrimination on the grounds of age.  Under the Employment Equality (Age) Regulations 2006 (and now under the Equality Act 2010), there is a defence to direct age discrimination if the measure can be objectively justified i.e. if it can be shown that the measure is a proportionate means of achieving a legitimate aim.

The Supreme Court in 2012 held that the law firm had legitimate aims, namely retention of senior associates, workforce planning and “congeniality”, which it was appropriate to achieve by applying a rule requiring retirement at a fixed age.  The question remained however, at what age?  The case was remitted to an employment tribunal to decide whether the mandatory age of 65 (rather than any other age) was reasonably necessary to achieve the firm’s aims.  The Tribunal held that it was and the EAT agreed with this.  The fact that a compulsory retirement age could have been set between the ages of 64-66, did not mean it was wrong in law to fix the retirement age at 65.  The employment tribunal had to balance the discriminatory effect of choosing a particular retirement age against its success in achieving its legitimate aims.  The factors the Tribunal took into account included the fact that the claimant, along with the other partners, had agreed to this retirement age and the circumstances as they were in 2006, when there was a designated retirement age of 65 for employees.

The default retirement age was repealed to take into account the fact that people are living longer and therefore need to work longer to save for their retirement.  It will be interesting to see in the years to come if there is a shift in the tribunal’s attitude to reflect this, resulting in a higher mandatory retirement age being the proportionate means of achieving a legitimate aim.

If you would like further information on this topic please contact the Edwin Coe Employment and ImmigrationTeam.

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