Since my last article on the subject of forced retirement, the Supreme Court (what we all used to call the House of Lords until they got a ‘down-with-the-kids’ facelift) has made a ruling in the excitingly named case of Seldon v Clarkson Wright and Jakes, which is of importance to all businesses struggling to grapple with the changing rules about retirement.
Mr Seldon was a partner in a law firm. The firm’s partnership deed provided that he was to retire at the age of 65. Mr Seldon wasn’t very happy with this and issued proceedings in the employment tribunal claiming unlawful age discrimination. His case has proceeded through four separate courts before reaching the highest court in the land for a final decision.
To reiterate the starting point, the default retirement age of 65 and the statutory procedure for retiring staff that reach that age has been abolished. However, businesses can still force employees to retire provided they can justify it as a proportionate means of achieving a legitimate end. This has caused many to question whether the default retirement age has actually been abolished at all.
On April 26, the Supreme Court dismissed Mr Seldon’s appeal affirming that although there was clear case of age discrimination, it was justified. The judges stated that each case has to be judged on its own merits and that organisations have to show that forcing someone to retire is legitimate in law (and under the particular circumstances) and the means adopted to achieve it are appropriate and necessary. In rejecting Seldon’s appeal, the court remitted the case to the employment tribunal to decide whether a retirement age of 65 was proportionate in the particular circumstances of the case.
By way of the briefest of summaries, the Supreme Court declared that any justification to force someone to retire has to relate to something in the public interest rather than circumstances purely relating to the business itself.
Thus, any employer that wishes to move staff on at 65 will have to have a valid non-commercial reason for doing so, such as a person’s dignity (it might be more dignified to force someone to retire rather then watch them decline) or a genuine public safety concern. Considerations such as cutting costs or improving competitiveness aren’t going to cut it with tribunals.
Therefore, employers should not interpret the Seldon judgment as an indication that maintaining a retirement age is an easy option. The test for justifying forced retirement is consequently narrower than we might have all at first thought and as a result, employers would need to take legal advice before proceeding with a retirement plan so as to reduce the possibility of costly tribunal hearings.