Those of us with an interest in employment law have been closely following the case of Seldon v Clarkson Wright & Jakes for a number of years now. The dispute concerns a Mr Seldon, who was a partner in a law firm. The terms of the partnership agreement required him to retire at the age of 65. But when it came to the crunch, he was reluctant to step down and argued that compulsorily ‘retiring’ him was an act of age discrimination. Back in 2006, when this dispute arose, new laws governing age discrimination had only recently come into force. As a result, this became something of a test case. The significance of the case grew still further when the law changed again in 2011, so as to remove the almost unqualified right to compulsorily ‘retire’ employees at 65. Before 2011, as a partner, Mr Seldon was in a different situation from that of an employee. 

Employers were able to rely on the default retirement age of 65 and compulsorily ‘retire’ almost any employee at that age. With partners like Mr Seldon, in order to avoid a finding of age discrimination, businesses had to be able to prove that the imposition of a compulsory retirement age was legally justified. Since the scrapping of the default retirement age, the compulsory retirement of employees also requires justification. So the approach that the courts and tribunals have taken to the Seldon case may well be instructive in indicating the likely approach to cases involving employees as well. The dispute has gone right through our judicial system, all the way up to the Supreme Court. But the most recent twist in the tale comes from the Ashford Employment Tribunal. In a judgment issued in just the last few weeks, they concluded that the compulsory retirement age of 65 was legally justified on the basis that, in particular: • by requiring partners to retire, it assisted in ensuring that the firm could offer more junior members of staff the prospect of promotion; and • the firm needed to know when people would retire, in order to assist with its long term planning. The Employment Tribunal acknowledged that the firm could have set a different retirement age. But they decided that 65 was justified, bearing in mind the particular circumstances of the case. 

Since the scrapping of the default retirement age for employees, most companies have stopped compulsorily retiring their staff because of the fear of age discrimination claims. This recent decision may be seen by some as an indication that employers could look to safely reintroduce compulsory retirement. I am not so sure. The decision in the Seldon case was based on very specific circumstances; it would be dangerous to presume that it sets too broad a precedent. Indeed the Employment Tribunal expressly indicated that the world has moved on in the last 6 years and this matter would not necessarily be decided in the same way if such a retirement was to happen now. It will still be a brave employer that compulsorily retires its staff. 

The more cautious amongst us will want to wait and see a few more cases go before the courts and tribunals before we run any risks James Willis – Head of Employment  This article is provided for general information only. Please do not make any decision on the basis of this article alone without taking specific advice from us. stevensdrake will only be responsible for the advice we give which is specific to you.