The Supreme Court has provided useful guidance on the circumstances in which a mandatory retirement age will be justified in a case involving a solicitor.
His partnership agreement provided that he would retire at age 65, but he wished to continue working. He claimed the relevant clause in the partnership agreement discriminated directly against him on the ground of age. This resulted in a legal action against his former firm which he took all the way to the Supreme Court.
The Court ruled that it was not discriminatory to require him to retire at 65 provided that the firm could show that the provision for compulsory retirement was a proportionate means of achieving a legitimate aim.
The Court held that to defeat a claim of direct discrimination, the employer must show that the treatment stems from an aim that can be objectively and reasonably justified as pursuing a legitimate social policy derived from the EC Equal Treatment Directive, such as those related to employment policy, the labour market or vocational training. Such aims are of a public interest nature as distinct from those which relate to the individual needs of a particular business, such as cost reduction and improving competitiveness. The European Courts have identified two different kinds of legitimate objective, which can be summed up as inter-generational fairness and dignity.
The focus must then turn to whether the identified aim is legitimate in the particular circumstances of the case and is actually being pursued. Finally, the means of achieving that aim must be both appropriate and necessary. The means must be carefully scrutinised in the context of the particular business in order to see whether they do meet the objective and there are not other, less discriminatory means that would achieve the same result.
In this case, the Supreme Court concluded that the firm’s action was capable of justification by the needs to retain staff, plan the structure of the workforce and to limiting the need to 'performance manage' partners. These objectives met the test of being based on legitimate social policy aims.
The case was remitted back to the ET, however, to consider whether the choice of 65 as the specific age at which partners were required to retire was a proportionate means of achieving the aims in this case.
For advice on any retirement issue, please contact us.