Seldon (Appellant) v Clarkson Wright and Jakes (A Partnership) (Respondent)
|Cite as:|| UKSC 16|
|Hand-down Date:||April 25, 2012|
Easter Term  UKSC 16 On appeal from:  EWCA Civ 899
Seldon (Appellant) v Clarkson Wright and Jakes (A Partnership) (Respondent)
Lord Hope, Deputy President Lady Hale
JUDGMENT GIVEN ON
25 April 2012
Heard on 17 and 18 January 2012
Appellant Respondent Robin Allen QC Thomas Croxford Richard O'Dair
(Instructed by Equality & Human Rights
(Instructed by Clarkson Wright and Jakes LLP)
Intervener (Age UK)
Dinah Rose QC Declan O'Dempsey
(Instructed by Treasury Solicitors)
(Instructed by Irwin Mitchell LLP)
Intervener (Secretary of State for Business, Innovation and Skills)
LADY HALE (WITH WHOM LORD BROWN, LORD MANCE AND LORD KERR AGREE)
This case raises difficult issues about the scope for justifying direct discrimination on the ground of age and in particular a mandatory contractual retirement age. It arises under the Employment Equality (Age) Regulations 2006 (SI 2006/1031) ("the Age Regulations"), the measure by which the United Kingdom transposed Council Directive 2000/78/EC, establishing a general framework for equal treatment in employment and occupation ("the Directive"), into UK law in respect of age discrimination. But the same issues arise under the Equality Act 2010, which has now replaced those Regulations.
Age is a relative newcomer to the list of characteristics protected against discrimination. Laws against discrimination are designed to secure equal treatment for people who are seen by society to be in essentially the same situation. The Aristotelian injunction that like cases be treated alike depends upon which characteristics are seen as relevant for the particular purpose. For most of history it was assumed that the differences between men and women were relevant for a whole host of purposes. Now the general rule is that they are not. But as Advocate General Sharpston commented in her Opinion in Bartsch v Bosch und Siemens Hausgeräte (BSH) Altersfürsorge GmbH Case C-427/06  ECR I-7245, at
, until comparatively recently differentiating on the basis of age was considered obviously relevant for the purpose of termination of employment. And it is still considered that age may be a relevant consideration for many more purposes than is so with the other protected characteristics. Hence recital 25 to the Directive, after recognising that the "prohibition of age discrimination is an essential part of meeting the aims set out in the Employment Guidelines and encouraging diversity in the workforce", continued:
"However, differences in treatment in connection with age may be justified under certain circumstances and therefore require specific provisions which may vary in accordance with the situation in Member States. It is therefore essential to distinguish between differences in treatment which are justified, in particular by legitimate employment policy, labour market and vocational training objectives, and discrimination which must be prohibited."
The reasons why age may be relevant in more circumstances than the other characteristics may seem obvious, at least where this has to do with the comparative capabilities of people of different ages. A younger person may not have the same training and experience as an older person. An older person may have lost the mental or physical strength which once she had. But it will be seen from recital 25 above that the European legislators considered that age discrimination might be justified by factors which had nothing to do with the characteristics of the individual but had to do with broader social and economic policy. These factors would not justify direct discrimination on the ground of any of the other protected characteristics, so why should age be different?
The answer must be that age is different. As Ms Rose put it on behalf of the Secretary of State, age is not "binary" in nature (man or woman, black or white, gay or straight) but a continuum which changes over time. As Lord Walker pointed out in R (Carson and Reynolds) v Secretary of State for Work and Pensions  1 AC 173, at , "Every human being starts life as a tiny infant, and none of us can do anything to stop the passage of the years". This means that younger people will eventually benefit from a provision which favours older employees, such as an incremental pay scale; but older employees will already have benefitted from a provision which favours younger people, such as a mandatory retirement age.
The critical issues in this case are what sort of policy considerations can justify such discrimination, who decides upon them, and how they are to be applied to any individual person. I turn, therefore, to the facts of this case.
Mr Seldon was born on 15 January 1941, qualified as a solicitor in 1969, joined Clarkson Wright and Jakes, the respondent firm, in 1971 and became an equity partner in 1972. He became the senior partner in 1989. He was also managing partner from 1989 to 1993. He reached the age of 65 on 15 January 2006.
There had been a succession of partnership deeds over that period but all had provided for the mandatory retirement of partners at the end of the year in which they reached the age of 65. Clause 22 of the deed adopted in 2005 provided:
"Any partner who attains the age of 65 years shall retire from the Partnership on 31st day of December next following his attainment of such age (or on such later date as the Partners shall from time to time and for the time being determine.)"
The deed did not make any provision for the removal of underperforming partners or for the reduction of their profit share to reflect underperformance. The partners preferred to address these matters through discussion and agreement.
As he approached his 65th birthday, Mr Seldon realised that for financial reasons he would need to go on working in some capacity for another three years. Early in 2006 he made a series of proposals to his partners with a view to continuing to work as a consultant or salaried employee for another three years. These proposals were rejected by the other partners in May 2006 on the basis that there was no sufficient business case, but an ex gratia payment of £30,000 was offered as a goodwill gesture to reflect his long service with the firm. The Age Regulations came into force on 1 October 2006. Mr Seldon told the firm that he was seeking legal advice on the Regulations and the offer of an ex gratia payment was withdrawn. Mr Seldon automatically ceased to be a partner in accordance with the partnership deed on 31 December 2006.
He began these proceedings in March 2007, alleging that his expulsion from the firm was an act of direct age discrimination and the withdrawal of the offer of the ex gratia payment was an act of victimisation. The firm claimed that his treatment was justified. They put forward six legitimate aims:
"29.1 ensuring that associates are given the opportunity of partnership after a reasonable period as an associate, thereby ensuring that associates do not leave the firm;
29.2 ensuring that there is a turnover of partners such that any partner can expect to become Senior Partner in due course;
29.3 facilitating the planning of the partnership and workforce across individual departments by having a realistic long term expectation as to when vacancies will arise;
29.4 limiting the need to expel partners by way of performance management, thus contributing to a congenial and supportive culture in the Respondent firm;
29.5 enabling and encouraging employees and partners to make adequate financial provision for retirement;
29.6 protecting the partnership model of the Respondent. If equity partners could not be forced to retire at 65, but employees (including salaried partners) could be, it would be preferable to keep lawyers at the Respondent as employees or salaried partners rather than equity partners."
It was made clear that the firm was not relying on the personal characteristics or any poor performance of Mr Seldon, nor were they relying on the structure of the wider market for legal services, but simply upon their own circumstances.
The Employment Tribunal ("ET") accepted that the firm did have the first, third and fourth of the claimed aims and that they were legitimate. Retention of associates was a legitimate aim for a firm "with a strategy for growth and the preservation of a reputation for the quality of its legal services" (ET [51.5]). The short and long term planning of the requirement for professional staff was facilitated by solicitors having, among other things, an expectation of when vacancies within the partnership would arise (ET [53.4]). The lack of a power to expel partners for under-performance was capable of contributing to the creation of a congenial and supportive culture among the partners (ET [54.8]. The tribunal were not persuaded that the firm actually had the second, fifth and sixth of the claimed aims: enabling all partners who stayed the course to become senior partner (ET [52.4]); encouraging partners to make financial provision for their retirement (ET [55.5]); or protecting the partnership model (ET [56.3]).
The ET also accepted that compulsory retirement was an appropriate means of achieving the firm's legitimate aims of staff retention, workforce planning and allowing an older and less capable partner to leave without the need to justify his departure and damage his dignity. The first two could not be achieved in any other way and introducing performance management would be difficult, uncertain and demeaning, so there was no non-discriminatory alternative to the third. Having balanced the needs of the firm against the impact of the rule upon the partners, the ET concluded that it was a proportionate means of achieving a congenial and supportive culture and encouraging professional staff to remain with the firm (ET
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