In Seldon v Clarkson, Wright and Jakes and anor the Court of Appeal upheld the EAT’s decision in rejecting Mr Seldon’s claim of direct age discrimination by holding that a compulsory retirement age of 65 for partners was a proportionate means of achieving the Firm’s legitimate aims, i.e. staff retention, workforce planning and eliminating the need to performance manage partners out of the organisation thereby preserving their dignity.
Mr Seldon appealed arguing that the three aims were not capable of being legitimate for the purpose of justifying direct age discrimination and retirement at 65 was not a proportionate means of achieving any or all of the aims. The Supreme Court (SC) dismissed the appeal. The SC confirmed that the approach to justifying direct age discrimination cannot be identical to the approach to justifying indirect discrimination. Where direct discrimination is concerned, the UK, in line with EU law, has chosen to give employers and partnerships the flexibility to choose which objectives to pursue, provided always that: these objectives can count as legitimate objectives of a public interest nature within the meaning of the EU Framework for Equal Treatment in Employment Directive; they are consistent with the social policy aims of the state; and the means used are proportionate, that is both appropriate to the aim and (reasonably) necessary to achieve it.
In rejecting the appeal, the SC held that all three aims were legitimate. Mr Seldon’s argument that these were individual aims of the business, rather than the sort of social policy aims contemplated by the Directive, was not fair. Staff retention and workforce planning were both directly related to the legitimate social policy aim of sharing out professional employment opportunities fairly between the generations. Limiting the need to expel partners by way of performance management, which is directly related to preserving “dignity”, was an aim which had been accepted by the ECJ as constituting a legitimate aim of employment and labour market policy. As to proportionality, where the first two aims were concerned, the choice of a mandatory retirement age of 65 was a proportionate means of achieving those aims, albeit that the circumstances were being judged at a time when the DRA was in force. Where the third aim was concerned, the case is already going back to the tribunal on the basis that it had not been shown that the choice of 65 was an appropriate means of achieving that aim.
The practical implications from this judgment are that while employers have the flexibility to choose which business aims to pursue, where direct age discrimination is concerned, the aims must be identifiable as legitimate objectives of a public interest nature and be consistent with the social policy aims of the UK. In addition, the means chosen must be proportionate, so while a compulsory retirement age in one organisation may be appropriate, it may not be in another. The means chosen, must achieve the aim, go no further than is necessary and the benefits to the business must outweigh any discriminatory effect on the individual. Clearly each case will rest on its merits, but the Employment Team are available to assist on objective justification, and in particular identifying social policy aims.
