Leslie Seldon was a civil litigation partner at Clarkson Wright and Jakes (CWJ) in Kent, rising to Senior Partner in 1989. Together with other partners from the firm, Mr Seldon signed a partnership deed that required them to retire from the firm by the end of December in the year that they turned 65. Mr Seldon reached this age on 15 January 2006 and requested that his partnership be extended past the December of that year. This was refused. Requests from him to continue working in a consultancy or salaried capacity were also refused, though he was offered a goodwill ex-gratia payment in the sum of £30,000. However, when Mr Seldon advised that he would be seeking legal advice under the newly enacted Employment (Age) Regulations from October 2006, this ex-gratia payment offer was withdrawn. Mr Seldon ceased to be a partner of the firm under the terms of the partnership deed on 31 December 2006.
In March 2007, Mr Seldon began proceedings under the above Age Regulations, claiming direct age discrimination and victimisation at the withdrawal of the ex-gratia payment. CWJ claimed that their treatment of Mr Seldon was justified for six reasons:
- The deed that had been signed by the partners ensured that associates in the firm were given the opportunity of progression, thereby ensuring their retention
- The arrangement ensured there would be a turnover of partners and, as such, any one of them could expect to assume the role of Senior
- This was necessary for succession planning
- The arrangement limited the need to have to expel partners ‘thus contributing to a congenial and supportive culture’
- Requiring partners to leave at the end of the calendar year in which they turned 65 encouraged them to make the appropriate provision for their retirement
- The arrangement protected the partnership model of the company
The case was initially heard at a 2008 Employment Tribunal. This tribunal found that the retirement age of 65 was appropriate in achieving the legitimate aims of reasons 1, 3 and 4 – retention, succession planning and the need to deal with underperforming partners. An Employment Appeal Tribunal in 2009 found that the initial ruling had not considered whether the aims could have been met by setting a retirement age other than 65. However, the Court of Appeal dismissed the case in 2010.
In January 2012, it reached the Supreme Court, at which Mr Seldon was supported by the Equality and Human Rights Commission. Although the 2006 Age Regulations have now been repealed, the Supreme Court acknowledged that the same issues arise under the Equality Act 2010, which replaced them. In their ruling, the Supreme Court agreed with the initial Employment Tribunal and ruled CWJ’s reasons as legitimate. However, it referred the case back to the Employment Tribunal for them to decide whether it was appropriate to apply these legitimate reasons at the age of 65, or whether another age was more appropriate. In her judgement, Lady Hale said ‘There is a difference between justifying a retirement age and justifying this retirement age’.
Comment
Well – what does this mean in practice? It seems clear that it is still possible to retire an employee when there is a legitimate reason for doing so. In the Seldon case, the legitimate reasons were the company interest to ensure retention of employees; succession planning and ensuring dignity was preserved. In her lead judgement, for example, Lady Hale said ‘improving the recruitment of young people, in order to achieve a balanced and diverse workforce is, in principle, a legitimate aim’.
However, the issue remains very much an open one. Whilst it may be OK to retire an employee / partner if there is a legitimate reason for doing so, is it OK to do it at 65? Is 65 the age at which performance is hindered and the need for turnover and succession planning should commence?
The Seldon case is not yet closed and employers should not see it as providing them comfort for retiring someone on the grounds of age.
Further Information
- Supreme Court – Seldon v Clarkson Wright and Jakes
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