We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
In a ruling issued on 25 April 2012, in the case of Seldon
-v- Clarkson Wright & Jakes [2012] UKSC16 ("Mr.
Seldon") the UKSC ruled that a compulsory retirement age may
be permissible even though it constitutes direct age
discrimination.
Facts
Mr. Seldon was a partner of Clarkson Wight & Jakes
("Clarkson") which had a partnership retirement age of
65. He asked to stay on past 65 but Clarkson refused. As a partner,
Mr. Seldon was not subject to the then statutory default retirement
age for employees of 65 and he claimed that the decision by
Clarkson to make him retire was direct discrimination for which
Clarkson had no "objective justification".
In hearings in lower courts, Clarkson had successfully argued
that it had objectively justifiable reasons for a compulsory
partnership retirement age being succession planning; making room
for and encouraging younger lawyers to aspire to partnership; and
the desire to have a congenial and supportive culture by limiting
the need to expel partners using performance management.
The case was referred to the UKSC for a ruling on what reasons
were capable of justifying direct age discrimination and therefore
permitting an organisation to have a compulsory retirement age or
ages' as the issue was of general importance following the
abolition of the "default retirement age" of 65 for
employees.
Decision
The UKSC noted that the relevant European Union directive
(prohibiting discrimination generally) contemplated that
"differences in connection with age may be justified under
certain circumstances...it is therefore essential to distinguish
between differences in treatment which are justified
by...employment policy, labour market and vocational training
objectives and discrimination which must be prohibited".
The UKSC also reviewed rulings issued by the European Court of
Justice ("ECJ") on age discrimination claims and noted
that the ECJ has held that aims such as "sharing employment
between the generations" and "not requiring employers
to dismiss [older workers] on grounds of incapacity"
which may be "humiliating" were "in
principle capable of objectively and reasonably justifying a
treatment on grounds of age".
The UKSC confirmed that staff retention, workforce planning, and
limiting the need to expel, by way of performance management are
all legitimate aims capable of justifying direct age discrimination
and hence a compulsory retirement age as they fall within the
categories of legitimate social policy objectives identified by the
ECJ being "inter generational fairness" and
"dignity" permitting direct age discrimination.
Mr. Seldon's case has returned to a lower tier tribunal for
a decision on whether, in his case, the specific retirement age
(65) could be justified.
What does this mean for employers?
The ruling does not mean that every employer can immediately
impose or reimpose a compulsory retirement age and indeed many
employers will not wish to do so.
Where an employer has retained compulsory retirement age, or
wishes to introduce one, it will have to show that retention of a
retirement age and the selection of a particular retirement age
continues to be appropriate and necessary in the particular
circumstances of the business having regard to the social policy
objectives noted by the UKSC.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Employers who fail to inform and consult employees in connection with a TUPE transfer may have to pay a penalty of 13 weeks’ gross pay to all affected employees.
Many employers will have experienced the situation whereby a senior employee leaves the company and shortly afterwards begins to solicit key clients in breach of his/her restrictive covenants.
Failure to follow the Acas Code of Practice on Disciplinary and Grievance Procedures will usually increase the risk of a dismissal being found to be procedurally unfair and can result in increased compensation being payable to a dismissed employee.
BIS has published an updated indicative timetable of the planned key dates for the Enterprise and Regulatory Reform Act 2013 and the introduction of financial penalties for employers who breach workers rights will now not be in October 2013.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
