When can a mandatory retirement age be justified?

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In Seldon v Clarkson Wright & Jakes, the EAT decided that a partnership's mandatory retirement age (MRA) of 65 for partners was a proportionate means of achieving the partnership's legitimate aims of workforce planning and staff retention.

Mr Seldon was compulsorily retired on 31 December 2006 and subsequently brought an age discrimination claim against his former partnership. The Supreme Court had previously decided that the firm's MRA could in theory be justified, but sent the case back to the Employment Tribunal (ET) to decide whether this was the case. Both the ET and the EAT decided that the partnership had successfully demonstrated that its MRA of 65 was a proportionate means of achieving its legitimate aims of being able to retain associates and allow both associates and partners to plan their careers. Importantly, the EAT also decided that other ages could also be potentially justified.

What does this mean?

Employers can justify a MRA where that MRA is proportionate and reasonably necessary in light of their legitimate business aims. When determining whether a MRA can be justified, tribunals must determine at what point a MRA ceases to be discriminatory and instead proportionately and legitimately achieves the business's aims. In Seldon, the EAT accepted that the partnership's aims of retention and workforce planning were legitimate and could only be achieved by way of its MRA.

Choosing an older retirement age may discriminate less, but this does not mean that one age (such as 65) will always be more or less appropriate than another age. Instead, tribunals must consider what age is reasonably necessary in light of the employer's particular aims and circumstances.

What can we do?

Although the statutory MRA has now been repealed and most employers no longer enforce their own MRA, employers who wish to revisit this issue and implement their own MRA should follow the guidance in this case to ensure that they are in a position to defend any challenge to the MRA brought by way of an age discrimination claim.

Justification of potentially discriminatory measures is highly fact-specific and whether an employer will be able to justify its MRA will largely depend on the employer's chosen aims, business type and demographic of its workforce. This is most definitely not an area where "one size fits all".

 

Topics:  ADEA, Age Discrimination, Retirement, Retirement Plan

Published In: Civil Procedure Updates, Civil Rights Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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