Employment And Pensions Legal Update - Seldon: The End Of The Road For Compulsory Retirement Age?

Originally published April 27, 2012

Keywords: compulsory retirement age, employment appeal tribunal, age discrimination, mandatory retirement

The long awaited decision from the Supreme Court in the case of Seldon v Clarkson Wright and Jakes has resulted in Mr Seldon (a partner in the law firm, CWJ, forced to retire at 65) losing his appeal. It is not quite the end of the road for Mr Seldon as the case has been remitted to the Tribunal to determine one final point. However, there is no doubt that this decision will create a significant challenge for employers seeking to justify a compulsory retirement age.

Justifying age discrimination

CWJ admitted that compulsory retirement at 65 amounted to direct age discrimination but defended the claim on the basis that it was justified. It relied on six legitimate aims, connected with workforce planning and maintaining the dignity of older partners. Having balanced the needs of CWJ against the impact of the retirement at 65 rule upon its partners, the Tribunal concluded that three of the stated aims were legitimate. They amounted to a proportionate means of achieving a congenial and supportive culture and encouraging professional staff to remain at the firm. The discrimination claim therefore failed.

Mr Seldon, having lost his appeals in the Employment Appeal Tribunal and the Court of Appeal, appealed to the Supreme Court.

The Supreme Court's view

In a detailed judgment, the Supreme Court ruled thefollowing:-

The defence for direct age discrimination is different to that for indirect age discrimination. For both, the test is ostensibly the same – i.e. that the treatment or provision, criterion or practice giving rise to discrimination must be a proportionate means of achieving a legitimate aim. However, in direct discrimination claims, the only aims on which an employer can rely are social policy objectives of a public interest nature. Individual aims which relate to the employer's situation, such as cost reduction or an improvement in competitiveness, would generally not constitute legitimate aims. The view of the Supreme Court was that the three aims identified by the Tribunal were capable of being legitimate aims in this case. An employer is required to justify a particular measure in the context of the circumstances of the business rather than the particular individual. The stated legitimate aims of a mandatory retirement age were related to legitimate social policy aims and also related to the...