17 Jan 2012
'Forced retirement' case comes before the Supreme Court
A landmark legal dispute comes before the Supreme Court today brought by a solicitor who claims he was forcibly retired.
Lawrence Graham's head of employment and pensions Yvonne Gallagher comments:
"Whilst the case before the Supreme Court, Seldon v Clarkson Wright and Jakes, concerns partners (who are self employed in legal terms) rather than employees, the judgement is certain to be of interest to employers too.
"Until April last year, it was possible for employees to give notice to terminate employment on the sole ground that an employee had reached age 65. Provided that the employer jumped through a number of procedural hoops in giving the notice, the employer was not at risk of claims of either age discrimination or unfair dismissal even though age was plainly the reason for the dismissal. This "get out" was never applied to relationships other than employment, such as partnership, in which discrimination on grounds of age must be shown to be justified. Following removal of the "get out "for employees last year, compulsory retirement of any individual, employee, or partner, must now be justified. The question which is of interest to all advisers is whether the courts will find that a standard retirement age which doesn't take account of the individual's circumstances, can ever be shown to be appropriate. Whilst, strictly speaking, the case won't apply to employees, whatever the Supreme Court says on the subject will be regarded as authoritative guidance on the way courts should treat claims from employees in the future.
"The firm in this case relied on a few different grounds to justify its retirement rule and these would be points commonly argued by employees too. The first was that the age had been agreed by all partners when they signed up to the partnership agreement. Whether the courts will require individual consent on a negotiated basis rather than what is arguably a standard from contract will be debated.
"Secondly they suggested that the need to allow younger staff to come through the ranks and have acceptable prospects of partnership would justify a compulsory age, even if there was not in fact a person "waiting in the wings" to be promoted.
"Finally they argued that a mandatory age which applied to all would prevent the need to deal with failing performance of older partners and thus contribute to maintaining a collegiate and supportive atmosphere in the partnership. That latter point looks very much at risk of being a stereotypical view based on an assumption that all workers will suffer some fall off in performance before they choose to stop working when the reality is likely to be that some do, but many don't.
"At heart is the question of whether our age discrimination legislation really means to make it the norm rather than the exception for older workers to remain in employment if they choose to do so and are still performing. An easily satisfied test of justification will undermine that aim and so all eyes (particularly older ones) will be on the Supreme Court in the coming weeks."