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Retirement & Age Discrimination

16/05/2012

Following the abolition of the mandatory retirement age back in 2011, employers risk claims of direct age discrimination by seeking to retire employees by a specific age.

In the recent case of Seldon v Clarkson Wright and Jakes, the Supreme Court considered what test employers must satisfy if they are seeking to justify direct age discrimination by retiring employees by a specified age.

In this particular case a Partner in a law firm was forced to retire at the age of 65 in accordance with the terms of the partnership deed.

The outcome of the case established that a mandatory retirement age may be justified in circumstances where employers are able to show that:-

(a) They have an "aim";

(b) That aim is potentially legitimate, namely that it is capable of being a legitimate social policy aim and in the public interest;

(c) The aim is also legitimate in the particular circumstances; and

(d) The means chosen to achieve that aim are proportionate, appropriate and necessary. Specifically, this will involve considering whether there are other, less discriminatory, measures which would achieve the same aim and outcome.

In these circumstances it was said that the aims of assisting ‘workforce planning’ and ‘staff retention’ were deemed to be directly related to the legitimate social policy aim of sharing out professional employment opportunities fairly between the generations.

Further, a third aim of limiting the need to remove partners by way of performance management was deemed to directly relate to the social aim of “retaining dignity”.

This case has now been remitted to the Employment Tribunal for a rehearing in light of the guidance provided by the Supreme Court.

Although the case commentary provides useful guidance to employers, this is an area of law that remains in its infancy and is in a state of flux. As such we would recommend that legal advice is sought before any steps are taken to retire an employee.

KBL are able to provide advice and assistance to any employers who feel that they have a compelling case for retirement at a specific age.