Partner At Law Firm Faces Age Discrimination

Retirement age is something that some workers await with pleasure. Some prematurely booking trips and making plans to spend time with friends/family.

As desirable as this may be to some, not all employees are as eager to put an end to their career, and a recent tribunal case has reiterated the fact that employees should be able to have a say as to when they wish to retire.

The case involved an ex-partner at the firm Walker Morris, who was forced to take an early retirement after his application to extend his stay with the firm was rejected. Martin Scott was 63 when his application was denied. Walker Morris operated a policy whereby it required partners over the age of 60 to reapply to stay on at the firm. The rationale being that they wanted to free up equity to give younger partners at the firm an opportunity to progress. To add further justification for the policy, former managing partner Malcolm Simpson also stated that partners begin to ‘slow down’ as they get older. The firm argued that Scott would not be able to show that he would make an ‘exceptional contribution’ if he stayed on for two more years.

Compulsory retirement in the UK is, in principle, age discrimination. However, the Tribunals judgement reflects the position taken in Seldon v Clarkson Wright & Jakes. In which the Supreme court held that the practice of making employees retire at the age of 65 could be justifiable in relation to business needs, if the employer can successfully argue that the practice has a legitimate aim. The most cited reasons in support of compulsory retirement include succession planning, ‘intergenerational fairness’ and avoiding the need to manage out an older employee on performance grounds. The employer must also be able to show that it is proportionate to set that retirement age as a means of meeting the proposed aim. Objective justification is not the only way to defend an age discrimination claim. The employer can also show that placing an upper age limit on the job falls within the ‘occupational requirement’ defence in the Equality Act, however this defence also requires the practice to be a ‘proportionate means of achieving a legitimate aim.’

In this instance, the Tribunal found no evidence to suggest that the senior partners at the firm were currently ‘equity hogging’ and the Tribunal also found there to be a lack of objective evidence concerning any deterioration in performance of partners in their 50s and 60s. The tribunal referenced Lady Hale in Seldon, in which she explains that age discrimination law is designed to “address the mismatch between reality and past assumptions…these assumptions have usually concerned age as a proxy for continuing incompetence.” Therefore, employers cannot rely on practices put in place solely based on assumptions. This will not amount to legitimate aim.

A spokesperson for Mr Scott explained that the judgement served as a ‘warning bell’ to firms across the UK that operate mandatory retirement policies. Businesses should be mindful when operating policies that are only applicable to employees around retirement age. Policies which are enforced in the absence of a legitimate business aim may be found to be discriminatory and may prove to be costly for the employer.

Please be aware that ‘first instance employment tribunal decisions’ do not set precedent and are not binding on other courts even where the facts are the same or very similar. These decisions may also be subject to appeal.

If you would like any additional information on workplace practices concerning retirement- please feel free to reach out to our Employment Team for a free initial consultation!