“… Most UK professional practices operate a system of inherently discriminatory compulsory retirement of partners at a fixed age, regardless of ability or performance, on the assumption that this is legally justified …”

The case of Seldon v Clarkson Wright & Jakes is due to be heard by the Supreme Court on 17 January 2012 in a hearing estimated to last three days.

The Justices (Lord Hope of Craighead, Lady Hale of Richmond, Lord Brown of Eaton-under-Heywood, Lord Mance of Frognal and Lord Kerr of Tonaghmore) will consider the correct approach to justification of prima facie direct age discrimination contrary to Regulation 3(1)(a) of the Employment Equality (Age) Regulations 2006.

The professional practices sector in particular has been awaiting the outcome of this long-running case with interest and perhaps some trepidation.

Most UK professional practices operate a system of inherently discriminatory compulsory retirement of partners at a fixed age, regardless of ability or performance, on the assumption that this is legally justified by the need to encourage younger members of the firm by making room for them at the top (the “dead man’s shoes” argument), and to avoid arguments as to whether or not older partners are still pulling their weight (the “collegiality” argument).

Mr Seldon, a partner in Clarkson, Wright & Jakes, a firm of solicitors, was compulsorily retired following his 65th birthday in accordance with the terms of the firm’s partnership deed. He brought a claim for unlawful direct age discrimination.

The Employment Tribunal decided that Mr Seldon had suffered less favourable treatment as a consequence of his age, but that the deed was a proportionate means of achieving certain legitimate aims.

The Employment Appeal Tribunal upheld the Employment Tribunal’s decision except that it found that the aim of “collegiality” did not itself justify fixing the compulsory retirement age at 65. The Employment Appeal Tribunal decided to send the matter back to the Employment Tribunal for it to reconsider the question of justification. Mr Seldon appealed the Employment Appeal Tribunal’s decision to the Court of Appeal. The Court of Appeal dismissed the appeal. Mr Seldon appealed to the Supreme Court.

It is uncertain whether the Supreme Court hearing will resolve all of the issues in the Seldon case itself, as the Employment Tribunal may be permitted by the Supreme Court to reconsider the issue of justification as it applies to the facts of that case, as originally ordered by the Employment Appeal Tribunal. By whichever route the Seldon case is to be finally determined, we can only hope that the Supreme Court will take the opportunity to offer clear guidance of more general application to all age discrimination cases where justication is in issue.

It may well be that once the outcome of the case is known it will be necessary for there to be a root and branch reassessment by professional practices as to how they deal with the issue of ageing partners. Some firms may be reluctant to abandon their traditional retirement practices, for the same reasons that have supported the justification argument to date, and may try to find ways around any tightening in the law. The result may be that with the hoped-for clarification we will see an upsurge in age discrimination claims by older partners.

Professional practices will be well-advised to study carefully the outcome of this month’s hearing, once judgment is handed down. A new round of debate amongst partnership practitioners will no doubt be followed by careful consideration by practices with their partnership law advisers as to how to redraft their deeds to ensure compliance with the law and avoidance of substantial claims.

 

If you are affected by any of the issues raised in this post and would like a confidential, no obligation meeting or telephone discussion to explore how I can assist you, please contact me.

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