EAT provides guidance on objective justification in age discrimination

In Seldon v Clarkson Wright & Jakes (UKEAT/0434/13) the EAT held that a law firm’s mandatory retirement age of 65 for partners did not amount to age discrimination.

Background

Both direct and indirect age discrimination can be objectively justified. The test is whether the treatment is a proportionate means of achieving a legitimate aim.

The Supreme Court held that Clarkson had identified legitimate social policy aims that justified the use of a compulsory retirement age for partners. The case was returned to the Employment Tribunal for it to determine whether the firm’s retirement age of 65 was a proportionate means of achieving the identified aims in the context of the particular business.

The Employment Tribunal held that the firm’s mandatory retirement age of 65 was appropriate and reasonably necessary for the achievement of its legitimate aims of retention and recruitment and workforce planning.

The Appeal

Mr Seldon appealed to the Employment Appeal Tribunal (‘EAT’) on the following points:

• Where an employer's legitimate aims can be achieved with a less discriminatory impact than the measure adopted, then that measure cannot be proportionate. In this case, less discriminatory mandatory retirement ages of 68 or 70 would have served the firm’s legitimate aims just as well.

This argument was rejected on the basis that the Employment Tribunal was entitled to conclude that 65 was an appropriate age. The EAT stated that the fact that the employer might have identified a different date within very much the same age range but which was slightly later does not mean that there was an error of law. The Employment Tribunal had to determine the balance between the discriminatory effect of choosing a particular age and its success in achieving the legitimate aim.

• The Employment Tribunal did not identify any headline fact which showed that 65 rather than another age was the place at which to set the balance i.e. the partnership did not provide any evidence to justify the Employment Tribunal’s decision.

The EAT referred to Lady Hale in the Supreme Court judgment who made it plain that it might be open to the Employment Tribunal to hold, on the material before it, that 65 was an appropriate age. The EAT supported the Employment Tribunal’s decision and stated that it was “implicitly taking into account its own view of the labour market and the world of employment and agreed these were put in the context of the particular firm and to the evidence there had been about this particular firm”.

• It was an error in law to take into account as relevant the consent of Mr Seldon and others to the default retirement age.

The EAT again referred to Lady Hale’s judgment where she “recognised that the agreement of a party to a measure later affecting them was relevant”. The EAT noted that it did not say it was decisive but it was taken into account when determining that “65 was not other than reasonably necessary as an appropriate response to meeting the legitimate aim”.

• That the Employment Tribunal erred in law in certain areas of its judgment in that it took account of irrelevant factors - the state pension age and the aim of collegiality.

This was rejected by reference to Lady Hale’s concluding paragraph where she held that in establishing whether one age is to be selected from a very narrow range (beyond which it would be inappropriate) it is not wrong in law to have regard to factors which assist where it could be placed.

The EAT held that the Employment Tribunal had correctly concluded that in the particular circumstances a retirement age of 65 was a proportionate means of achieving a legitimate aim.

Commentary

Although about partnership this is an essential case for any employer wishing to justify either the use of a mandatory retirement age.

The EAT judgment demonstrates a sensitive balancing act between setting a particular retirement age (and its discriminatory effect) with its success in achieving a legitimate aim(s). Whether an employer can justify setting a mandatory retirement age would be heavily dependent on the context and circumstances of a case and the nature of the organisation, existence of a less discriminatory alternative, and the strength of the evidence in justifying the retirement age. Although the Employment Tribunal was influenced by the fact that Mr Seldon had, alongside the other partners, consented to a compulsory retirement age of 65, employers may not be able to place any reliance on employee consent to a mandatory retirement age given the uneven bargaining position between employers and employees. It would be quite wrong to see this case as reviving 65 as a default retirement age.