Supreme Court Hands Down Retirement Judgment
The Supreme Court hands down judgement that has left the door open for allowing businesses to set their own retirement age for staff. But only if the reasons for doing so meet both their own and public policy objectives.
The case, viewed as one of the most significant for years on the issue of age discrimination, involves Mr. Leslie Seldon. Mr Seldon was a former senior civil litigation partner at Clarkson Wright and Jakes (CWJ).
Although the default retirement age (DRA) was abolished in October 2011, it is theoretically possible for organisations to introduce their own retirement age as long as they have a legitimate aim and the particular Default Retirement Age chosen is a proportionate means of achieving that aim.
CWJ claimed that its retirement policy, which led to Mr. Seldon leaving the firm when he turned 65, satisfied those requirements as it:
- allowed effective succession planning of partners and the workforce;
- provided associates with a clear opportunity of partnership, so aided retention (both of these two reasons were referred to as the “collegiality” reasoning); and
- avoided the need to expel partners through performance management, (the “dignity” point).
The Supreme Court has accepted the principle that a private employer could have its own DRA, but is also appears to have effectively narrowed the circumstances in which there can be a legitimate aim by declaring that, in addition to its own internal legitimacy, an employer must equate its aims to wider public policy objectives such as those relating to employment policy, the labour market or vocational training. It also called on Tribunals to drill down more closely into an employer’s assertions about the aim being pursued and the means of doing so, and not accept broad propositions.
In this case, the Supreme Court accepted that CWJ’s aims set out above were legitimate, having regard to the public policy objectives in the previous paragraph. However, it thought that there had not been sufficient scrutiny of whether the chosen retirement age of 65 was a proportionate means of achieving those aims, the Supreme Court defining “proportionate” as “appropriate” and “necessary” to achieve the aims.
Therefore, the case is being sent back to the Employment Tribunal in order that it might carry out that closer examination. Only then will there be a final conclusion on the overall issue of whether this employer is entitled to have its retirement age of 65 for partners.
The latest judgment in this long-running case could, therefore, make it more difficult for organisations to justify their own retirement age.