EAT Offers Guidance on Determining a Proportionate Retirement Age

The Employment Appeals Tribunal (EAT) has held, in Seldon v Clarkson Wright and Jakes, that it was proportionate for a law firm to choose a retirement age of 65, notwithstanding the fact that a higher age could have had a less discriminatory effect.

The respondents, the law firm, were able to show that the age of 65 was a proportionate means of achieving a legitimate aim, which is the justification all employers must show following the removal of a default retirement age.

The case reached the EAT after Mr Seldon appealed against the Employment Tribunals found against him, ruling that the age of 65 was proportionate, consequently meaning Mr Seldon had not suffered age discrimination after having to retire from the solicitors' practice at that age. The case had previously been referred back to the Employment Tribunal following the Supreme Court's decision that the firm did have legitimate aims, so these were not in question. All the Tribunal had to decide was whether or not the specific age was proportionate.

An important point to note is that in determining whether a particular age is proportionate, Employment Tribunals will closely examine the reasons put forward by the employer, and any facts relating to the particular business meaning claims will be heard very much on a case-by-case basis.

The decision should bring confidence to employers when faced with the challenge of deciding a specific retirement age, as a precise age will not be the critical point. The EAT confirmed this by rejecting one of Mr Seldon's arguments that other ages (e.g. 68 or 70) would have been equally or more proportionate, by saying that even if a higher age was less discriminatory, it did not change the fact that 65 remained proportionate. That being said, businesses should be aware that only a narrow range of ages will be considered proportionate, meaning there is not a lot of leeway.

The most important steps to take as an employer are to set out what the legitimate aims of your business are, and then carefully consider an age relating to that aim. For example, a legitimate aim in the Seldon case was the need to ensure that associates in the firm had the opportunity to progress their career and become partners, or else the firm could face losing them.

However, conflicting interests must also be balanced - lower ages may be detrimental to older staff, while higher ages may be a disincentive to junior staff when considering if they should remain with the business or move on elsewhere.

Prudent employers should also document all deliberations during the decision-making process, and thoroughly explain the reasons behind selecting a certain age, as these can be used as evidence in the event of an age discrimination claim.

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