17 May 2012

Justification for direct age discrimination must be related to the general public interest.

This month's biggest employment law news stories have to be the Supreme Court's two decisions on age discrimination in Seldon v Clarkson Wright & Jakes and Homer v West Yorkshire Police. Both give useful guidance about how cases on age discrimination will be considered from now on - but both leave questions to be considered further.

Seldon is a case relating to membership of a professional partnership, but the principles discussed will apply equally in employment cases. Put briefly, Mr Seldon challenged a rule in in the partnership deed providing for compulsory retirement at age 65 as direct age discrimination. The partnership defended the rule on the basis that it was justified, that is, that the rule was a proportionate means of achieving a legitimate aim. Three of the reasons put forward as legitimate aims were accepted by the ET:

• Retention of associates by ensuring that they have a chance to become partners within a reasonable time;
• Facilitating workforce planning; and
• Promoting a supportive culture by minimising the need to use performance procedures to expel partners.

At both ET and Court of Appeal level it was considered that the mandatory retirement age was justified: Mr Seldon appealed to the Supreme Court, whose judgment surveyed the relevant European case law and drew out some general principles from it.

The Supreme Court considered that in direct discrimination cases like this, aims must be related to a general public interest, and not just aims specific to the business in question. Possible legitimate aims could be categorised into two types - "inter-generational fairness" and "dignity". It accepted that the three reasons for the compulsory retirement age in this case were potentially legitimate aims. 

Having established that the aims were potentially legitimate, the next question was to consider whether the means used - the compulsory retirement age - was appropriate and (reasonably) necessary in the particular case. The case will now be going back the ET to consider whether the particular retirement age of 65 is justified.

This will involve looking at:

• whether there were other means to achieve the aim which would have less of a discriminatory impact: and
• whether the means adopted would have the desired effect in the particular business.

What may look like a legitimate aim will not work as justification if, in the particular case, it will not further that aim - for example, favouring the recruitment of young people to achieve a balanced workforce will not be proportionate if there is in fact no difficulty attracting young people to an organisation.

While European case law indicated that it is relevant to look at the gravity of the impact on employees discriminated against as part of the consideration of proportionality, it would be wrong to require an employer to justify a general rule in relation to its effect on a particular individual:

"There is therefore a distinction between justifying the application of the rule to a particular individual, which in many cases would negate the purpose of having a rule, and justifying the rule in the particular circumstances of the business. All businesses will now have to give careful consideration to what, if any, mandatory retirement rules can be justified."

When the tribunal are considering the legitimacy of a retirement age of 65 in this case, they are likely to have regard to the fact that at the relevant time, a default retirement age of 65 was in force for employees.