A case awaits judgment from the European Court of Justice on
whether employees can be forced to retire at 65.
The EAT said that law firm Clarkson Wright and Jakes (CWJ) was
not entitled to force one of its partners, a Mr L J Seldon, to
retire at 65 just because of a general assumption that people's
performance deteriorated at that age.
The EAT accepted CWJ's argument that it had a retirement age to
avoid undermining the collegiate atmosphere of the firm by
resorting to specific performance measures to oust partners. It
said, though, that it had not shown that that age should be 65.
"The collegiality objective does justify the adoption of a
compulsory retirement rule, but … the Tribunal was not entitled to
form the view that this objective itself justified fixing that age
at 65," said the EAT's ruling.
The EAT supported two other reasons used by CWJ to force
Seldon's retirement. Those were that the firm had to have a
definite retiring age so that it could plan properly for the future
and so that it could offer more junior lawyers the realistic
prospect of promotion to partner.
The EAT has asked the Employment Tribunal to reconsider the case
solely on those grounds.
"The Tribunal was entitled to conclude that the other two
objectives were legitimate," it said. "We cannot be sure what
decision the Tribunal would have reached had it assessed the
question of justification by reference to these two objectives
alone. Accordingly the case must be remitted to the Tribunal to
consider the question afresh."
Though the EAT accepted that a compulsory retirement age was a
legitimate way for the business to operate in order to manage its
business properly, it said that the choice of 65 in this case was
not justified.
"The assumption underlying the rule is that as partners reach
the age of 65 so there is a significantly greater risk that they
will under perform," said the ruling. "That, says [Seldon], is an
unjustified and discriminatory assumption. The partnership produced
no evidence that partners of or around that age did have particular
difficulties with under performance."
"We are satisfied that the appellant is right to say that there
has been a stereotyped assumption that partners will by the age of
65 be more likely to be under performing than partners of a younger
age," it said. "The Tribunal's assessment was based on the
assertion that this was a reasonable assumption. With respect to
the Tribunal, we think that reasoning of that kind is what the
legislation is seeking to avoid."
Mr Justice Elias, the President of the EAT, said in his ruling
that the Tribunal should not have allowed the assertion about the
performance of over-65s to be the basis of the decision.
"It is not self-evident that performance will dip in that way at
that age, and there was no evidence to support that proposition
before the Tribunal," the ruling said. "It follows that, in our
view, this particular legitimate aim relied upon, namely to promote
collegiality between partners, could not justify the rule."
The EAT said that choosing an age could be acceptable, but it
would need to be a reasoned choice.
"In such a case the partnership needs to analyse very carefully
the age at which performance falls off," said the ruling. "That
does not necessarily mean that there have to be specific examples
of underperforming partners. That will be impossible in, say, a new
firm starting out. It would, however, require evidence of a
considered and reasoned explanation as to why the particular age
had been chosen. Mere assertion would not be enough."
Employment law specialist Ben Doherty of Pinsent Masons, the law
firm behind OUT-LAW.COM, said that the case should be a reminder to
firms that decision based on assumptions can be challenged under
discrimination laws.
"The fact that this matter has been referred back to the
tribunal does not necessarily mean that a different decision will
be reached," said Doherty. "However, the fact that the EAT were not
prepared to accept that there is a general presumption that
performance tails of at 65 is a timely reminder to all employers
about the risks of making stereotypical assumptions about employees
be it because of age or any other factor."
