by Laurie Anstis on April 25, 2012
The basic facts of the case are set out in one of my earlier posts. The key question for the Supreme Court to decide was whether the business of which he was a partner could justify the compulsory retirement of Mr Seldon at 65 (or, to be strictly accurate, at the end of the calendar year in which he became 65). In order to be justified, compulsory retirement at 65 had to be a “proportionate means” of meeting a “legitimate aim”.
The employment tribunal had identified three aims as being legitimate:
“- ensuring that associates are given the opportunity of partnership after a reasonable period as an associate, thereby ensuring that associates do not leave the firm,
– facilitating the planning of the partnership and workforce across individual departments by having a realistic long term expectation as to when vacancies will arise
– limiting the need to expel partners by way of performance management, thus contributing to a congenial and supportive culture in the firm”
The issues for the Supreme Court are set out in paragraph 14 of the judgment:
“(1) Whether any or all of the three aims of the retirement clause … were capable of being legitimate aims …
(2) Whether the firm has not only to justify the retirement clause generally but also their application of it in the individual case; and
(3) Whether the ET was right to conclude that relying on the clause in this case was a proportionate means of achieving any or all of the identified aims.”
The Supreme Court held:
1) That to amount to a legitimate aim, in the context of a direct discrimination claims such as this, the legitimate aim had to be of a “social policy nature”, and could not simply be a private aim of the employer.
2) That European case law suggested that both “inter-generational fairness” (such as the first and second aim that the tribunal had identified) and “dignity” (such as the third aim that the tribunal had identified) were capable of being such legitimate social policy aims.
3) That even if these were capable of being legitimate aims they still had to actually be legitimate aims in the context of the employer’s workforce – so if there was no actual need for “inter-generational fairness” it could not be a legitimate aim for that particular employer.
4) That where there was a general justification for a particular rule, this will usually be sufficient to justify its application to a particular individual.
5) That on the facts of this case the identified aims were legitimate.
6) That the case should go back to the tribunal to decide whether compulsory retirement at 65 was a proportionate (in the European sense of “appropriate and necessary”) way of achieving the third aim, with, it seems, also the option of considering whether it was a proportionate means of achieving the first and second aims. In other words, given that the aims were legitimate, was compulsory retirement at 65 a proportionate means of achieving them? Both Lady and Hale and Lord Hope considered that the existence, at the time, of an exemption for retirement of employees at 65 could be relevant to this consideration.
The ultimate effect of all of this is to throw the spotlight back on to the question of proportionality. Can it be said that compulsory retirement at 65 (or the end of the calendar year in which you become 65) is “appropriate and necessary” to achieve the identified aims.
It seems to me that this of itself throws up a whole range of interesting issues.
As regards “inter-generational fairness”, the first question is presumably whether it is necessary at all to compulsorily retire the older partners at all in order to give opportunities to the associates or carry out workforce planning. It might be argued that workforce planning could adequately be dealt with by, say, long notice periods for the partners. As for opportunities for the associates, does this actually require compulsory retirement? What about moving the older partners to another status, such as “consultant”? This was one of the options that Mr Seldon seems to have suggested.
If it is necessary, is it appropriate that the compulsory retirement age is 65, rather than some other age? The judgment seems to suggest that almost any retirement age would facilitate this objective. If so, does that mean that any age is appropriate, or does it mean that no age is appropriate because none can be said to be more appropriate than any other? Is the tribunal to determine that an exact age is appropriate? If so, does the tribunal have to rule out any age other than that one? What, if any, “margin of appreciation” does the partnership enjoy?
These problems seem even more acute when considering the “dignity” point. At para 58 Lady Hale expresses some doubts (which I share) whether this actually ought to be a legitimate aim at all. It seems to me odd to say that it is not appropriate to performance manage an older worker in the way that a younger worker would be managed, but that is the state of the law at the moment.
On the basis that this is a legitimate aim, is it necessary to deal with this by means of compulsory retirement at all? There will be some interesting arguments on that point, but above all on the question of whether 65 is an appropriate age for this. What evidence is there that performance becomes a problem over 65, as opposed to over 60, 70 or 80? Both Lady Hale and Lord Hope referred to the exemption that at the time existed for retirement of employees at 65, with Lord Hope saying it was “at the relevant time, an acceptable way of achieving the legitimate aim”. That may well be so, but surely that does not necessarily make it “appropriate and necessary”. Much of discrimination law is about challenging what was once “acceptable” behaviour.
As ever, corrections, clarifications and observations welcome in the comments.