[Thanks to Tom Mountford, pupil barrister at Blackstone Chambers, for providing this case summary]
The Court of Appeal has handed down its decision in Seldon v Clarkson, Wright & Jakes, a case concerning the ability of a partnership to justify a mandatory retirement age of 65. The Court, dismissing the appeal of Mr Seldon, held:
- the Framework Directive permitted Member States to derogate from the principle of equal treatment in relation to direct age discrimination by permitting justification. This power of derogation (Article 6) is directed at Member States implementing the Directive and not at private employers.
- the UK implemented that derogation by way of, amongst other provisions, Regulation 3 of the Age Regulations which provides that a person discriminates against another as long as the first person cannot show the treatment or, as the case may be, provision, criterion or practice is a proportionate means of achieving a legitimate aim. Regulation 3 thus allows for employers to justify both direct and indirect discrimination. This was held by Blake J to be a lawful derogation in Age UK.
- the requirement in Article 6 of the Framework Directive of an objective and reasonable justification by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, achieved by appropriate and necessary means, (which the ECJ in Heyday has glossed as a requirement of "legitimate social policy objectives") is not a test which private employers need to satisfy in seeking to justify direct age discrimination under Regulation 3 of the Age Regulations.
- rather, an employer's legitimate aims are not limited to "social policy objectives". As the ECJ noted the legislation gives employers "some discretionary powers or a degree of flexibility". The Court of Appeal held that the appropriate test is whether an employer's actions are consistent with the social or labour policy of the United Kingdom which justified the Regulations.
- the principle that a discriminatory measure may be justified by a legitimate aim other than that which was specified at the time when the measure was introduced, applied by the ECJ in the context of indirect discrimination in Schönheit, is equally applicable in the context of direct discrimination.
- a private employer's aim of producing a happy workplace is within, or consistent with, the UK Government's social policy justification for the Age Regulations. To allow people to retire with dignity would also seem to be a justification for having a mandatory retirement age.
- it is a legitimate consideration that a rule such as a mandatory retirement age in a partnership deed has been agreed by parties of equal bargaining power.
- the assessment of justification in the context of a mandatory retirement age must be made at the point of termination, involving the two interrelated questions: (1) as at the date of termination was a rule requiring retirement at that age justified? (2) was the application of that rule justified in the particular circumstances?
- however, in general, it is of the essence of a mandatory rule that it is generally applied. As such, it will be rare that the second question requires much beyond the justification of the general rule.
- a compulsory retirement age cannot be defeated on the basis that a less discriminatory means could be employed by reference to a higher age. Such an effect cannot have been within the legislative intendment as it would mean that it would be impossible to justify any retirement age yet Recital 14 of the Directive seems to contemplate the legitimacy of a retirement age.