Seldon v Clarkson Wright & Jakes

The Supreme Court considered whether a mandatory retirement age in a partnership deed constituted lawful direct age discrimination under regulation 3 of the Employment Equality (Age) Regulations 2006 read with article 6(1) of Council Directive 2000/78/EC. The court confirmed that direct age discrimination can be justified, but only where it pursues legitimate social policy objectives (for example employment policy, labour market or vocational training aims) and the means chosen are both appropriate and necessary. The Court accepted that the Employment Tribunal's identified aims—retention of associates, workforce planning and avoiding dismissal for poor performance (collegiality/dignity)—were in principle legitimate aims within article 6(1). However, the proportionality of a particular retirement age must be scrutinised in the context of the employer's circumstances and as at the date of its application. The appeal was dismissed, with the court emphasising that the case should be considered by the tribunal as at the relevant date (2006) and that it may properly re-examine whether the choice of age 65 was proportionate to the legitimate aims.

Background and parties: Mr Seldon, an equity partner who ceased to be a partner on 31 December 2006 under a partnership deed clause mandating retirement at age 65, brought claims of direct age discrimination and victimisation under the Age Regulations 2006. The respondent firm relied on a number of justificatory aims. The Employment Tribunal accepted three aims as legitimate and found the retirement rule proportionate; the Employment Appeal Tribunal remitted part of the justification analysis back to the Tribunal; the Court of Appeal dismissed Mr Seldon's appeal. The Secretary of State and Age UK intervened in the Supreme Court.

Nature of the claim and relief sought: A claim for unlawful direct age discrimination (and a secondary complaint of victimisation) arising from expulsion from a partnership position by reason of a mandatory retirement clause; declaratory and compensatory relief would have followed at earlier stages but the critical issue before this Court was lawful justification.

Issues before the Court: (i) Whether the Employment Tribunal's three identified aims could constitute legitimate aims for the purpose of justifying direct age discrimination under article 6(1) of the Directive and regulation 3 of the Age Regulations; (ii) whether justification must be made both for the general rule and for its application to the individual; and (iii) whether application of the clause in this particular case was a proportionate means of achieving the legitimate aims.

Reasoning and outcome: The Court reviewed the relevant Luxembourg jurisprudence and domestic authorities and concluded that article 6(1) contemplates social policy aims of a public interest nature, distinguishable from purely private aims such as mere cost reduction. The Court accepted that the Tribunal's three aims could be legitimate in principle because they related to inter-generational fairness and dignity. The Court emphasised that the justification inquiry for direct age discrimination differs from the usual indirect discrimination test: identification of a legitimate social policy aim is primarily a matter for the State (or social partners), and the employer's measure must be assessed for appropriateness and necessity. The Court rejected the submission that the partners had to show those public aims were in their minds when agreeing the deed and observed that justification is assessed objectively as at the time the treatment was applied. The appeal was dismissed, but the tribunal should be allowed to consider whether age 65 specifically was an appropriate and necessary (proportionate) means of achieving the aims in the circumstances as they were in 2006.

Wider context: The judgment emphasises the narrower scope for purely private justificatory aims, clarifies that article 6(1) imposes a public-interest focus when justifying direct age discrimination and highlights that justification must be assessed with careful proportionality scrutiny; it also notes changes to the statutory landscape (the designated retirement age for employees was being phased out) but considers the facts as they stood in 2006.

Appeal dismissed. The Supreme Court held that direct age discrimination can be justified only by legitimate social policy objectives (as recognised by article 6(1) of Directive 2000/78/EC) and by proportionate means. The Tribunal's identified aims were, in principle, legitimate, but the proportionality of applying age 65 in this partnership must be scrutinised as at the date of application; the matter should be further considered by the Employment Tribunal on that basis.

Employment Tribunal decision (November 2007) accepted three legitimate aims and found the retirement clause proportionate; Employment Appeal Tribunal [2009] IRLR 267 remitted part of the justification issue to the Tribunal; Court of Appeal dismissed the appeal [2010] EWCA Civ 899; appeal to the Supreme Court dismissed [2012] UKSC 16.