Call us on:  0808 172 93 22

Retirement Age of 65 Could Be Justified

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SUMMARY: Following the decisions of the Employment Appeal Tribunal, Court of Appeal and Supreme Court, an Employment Tribunal has found that the retirement age of 65 for Mr Seldon was justified in all the circumstances.

Background

This age discrimination case was first brought in 2006 and a decision has finally been made.  Here’s a reminder of the basic facts:

The Equality Act 2010 (EQA) permits age discrimination where an employer can justify this adverse treatment i.e., where it can be shown that discrimination against an employee because of age is a “proportionate means of achieving a legitimate aim”.

In May 2012 we reported on the Supreme Court’s decision that the mandatory retirement age of 65 for Mr Seldon could be justified in theory.  The Supreme Court had confirmed that the aims of retention, planning and collegiality were legitimate as they fell within the categories of inter-generational fairness and dignity.

It was then for the Employment Tribunal (“ET”) to reach a decision on whether the mandatory retirement age of 65 was a proportionate means of achieving the identified aims.  The ET only considered the aims of retention and planning.

Decision

The ET held that the retirement provision of the partnership deed (stating a retirement age of 65) was justified in all the circumstances and so Mr Seldon’s age discrimination claim was unsuccessful.

The ET held that the mandatory retirement age of 65 was appropriate and reasonably necessary for the achievement of each of the aims of retention and planning.

The ET noted in relation to the retention aim that there was evidence that solicitors would not have joined a practice where there were partners in their 70s and 80s waiting to be paid off.  In addition, when deciding whether to join and/or remain with the firm, associates would consider their future prospects and there was evidence that they would know when partners were due to retire.

In relation to the planning aim, the solicitor’s firm produced a number of planning and strategy documents and there was evidence that it needed to be aware of dates of retirement and plan accordingly.

Does this mean that employers can retire employees at 65?

This does not mean that employers can automatically impose a retirement age of 65.

Each employer will need to justify their reasons for imposing a mandatory retirement age for particular employees and the Employment Tribunal particularly emphasised that at the time that Mr Seldon retired, the default retirement age for employees was 65.  This default retirement age has now been removed and employers will need to justify any retirement age.

The decision of the ET in this case was also fact specific and it can be seen from the “decision” section above that the firm of solicitors had to produce evidence of both how the retirement age of 65 achieved its planning and retention aims.

The ET also particularly noted that Mr Seldon was in an equal bargaining position when he consented to the mandatory retirement age of 65 in the partnership deed.  It may be that if there is a collective agreement, where employees have a say in identifying a retirement age, a particular agreed retirement age is more likely to be justified.  However, this is only one of a number of factors to be taken into account.

If you would like any further advice on age discrimination issues, including if you are considering imposing a mandatory retirement age for your employees, please contact us using the contact information below.

Case: Seldon v Clarkson Wright & Jakes ET/1100275/07, 28 May 2013

Hazel Robbins, Solicitor.

Contact Information

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

Updated: by FG Solicitors
Call us on:  0808 172 93 22

RETIREMENT AGE OF 65 COULD BE JUSTIFIED

picture2.

SUMMARY: Following the decisions of the Employment Appeal Tribunal, Court of Appeal and Supreme Court, an Employment Tribunal has found that the retirement age of 65 for Mr Seldon was justified in all the circumstances.

Background

This age discrimination case was first brought in 2006 and a decision has finally been made.  Here’s a reminder of the basic facts:

  • Mr Seldon was a partner of a solicitor’s firm.
  • He was subject to a mandatory retirement age of 65 years old which was contained within a partnership agreement.
  • Upon reaching 65 years’ old, Mr Seldon asked the other partners if he could continue to work beyond 65.
  • His request was rejected on the basis of there being no sufficient business need.
  • Upon termination, Mr Seldon issued proceedings against the firm for direct age discrimination.

The Equality Act 2010 (EQA) permits age discrimination where an employer can justify this adverse treatment i.e., where it can be shown that discrimination against an employee because of age is a “proportionate means of achieving a legitimate aim”.

In May 2012 we reported on the Supreme Court’s decision that the mandatory retirement age of 65 for Mr Seldon could be justified in theory.  The Supreme Court had confirmed that the aims of retention, planning and collegiality were legitimate as they fell within the categories of inter-generational fairness and dignity.

It was then for the Employment Tribunal (“ET”) to reach a decision on whether the mandatory retirement age of 65 was a proportionate means of achieving the identified aims.  The ET only considered the aims of retention and planning.

Decision

The ET held that the retirement provision of the partnership deed (stating a retirement age of 65) was justified in all the circumstances and so Mr Seldon’s age discrimination claim was unsuccessful.

The ET held that the mandatory retirement age of 65 was appropriate and reasonably necessary for the achievement of each of the aims of retention and planning.

The ET noted in relation to the retention aim that there was evidence that solicitors would not have joined a practice where there were partners in their 70s and 80s waiting to be paid off.  In addition, when deciding whether to join and/or remain with the firm, associates would consider their future prospects and there was evidence that they would know when partners were due to retire.

In relation to the planning aim, the solicitor’s firm produced a number of planning and strategy documents and there was evidence that it needed to be aware of dates of retirement and plan accordingly.

Does this mean that employers can retire employees at 65?

This does not mean that employers can automatically impose a retirement age of 65.

Each employer will need to justify their reasons for imposing a mandatory retirement age for particular employees and the Employment Tribunal particularly emphasised that at the time that Mr Seldon retired, the default retirement age for employees was 65.  This default retirement age has now been removed and employers will need to justify any retirement age.

The decision of the ET in this case was also fact specific and it can be seen from the “decision” section above that the firm of solicitors had to produce evidence of both how the retirement age of 65 achieved its planning and retention aims.

The ET also particularly noted that Mr Seldon was in an equal bargaining position when he consented to the mandatory retirement age of 65 in the partnership deed.  It may be that if there is a collective agreement, where employees have a say in identifying a retirement age, a particular agreed retirement age is more likely to be justified.  However, this is only one of a number of factors to be taken into account.

If you would like any further advice on age discrimination issues, including if you are considering imposing a mandatory retirement age for your employees, please contact us using the contact information below.

Case: Seldon v Clarkson Wright & Jakes ET/1100275/07, 28 May 2013

Hazel Robbins, Solicitor.

Contact Information

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.