June 20, 2012

Employment e-Brief – Age Discrimination Update

The Supreme Court has recently determined two cases which provide further helpful guidance on principles applicable in age discrimination claims.

SELDON –V-CLARKSON WRIGHT and JAKES

This case, concerning a firm of solicitors, looked at the question of whether compulsory retirement of a partner in a law firm at the age of 65 was justified under the Employment Equality (Age) Regulations 2006 (before Equality Act 2010). It specifically looks at the test for justifying direct age discrimination and whether it is different from the general test for justifying indirect age discrimination.

It was accepted that a clause in the partnership agreement compulsory retiring partners at the age of 65 was directly discriminatory; the issue was whether the clause could be objectively justified as being a proportionate means of achieving a legitimate aim.

The legitimate aims put forward by the Respondent were staff retention and ensuring that senior solicitors are given the chance of partnership, workforce planning, and limiting the use of performance management to expel partners therefore creating a supportive firm culture. These were all identified as falling under legitimate social policy objectives identified by the ECJ of ‘inter-generational fairness’ and ‘dignity.’

The Tribunal rejected the Claimant’s claims and found that retirement at 65 was a proportionate means of achieving the aims noted above.

The Appeal at the EAT agreed, however they felt that the third aim was based on a discriminatory stereotype that a partners’ performance reduces after 65. Therefore the EAT sent the case back to the same Tribunal to review this point.

The Claimant then appealed the whole case to the Court of Appeal unsuccessfully and then appealed again to the Supreme Court on virtually all of the issues it seems, particularly whether the aims of the retirement clause were legitimate to justify direct age discrimination, whether the retirement clause must be justified generally as well as on its application to the Claimant, and whether the Tribunal was correct to conclude that the retirement clause was a proportionate means of achieving any of the aims identified.

The Supreme Court dismissed the appeal and confirmed the decision to send the case back to the Tribunal with regard to the third aim of avoiding use of performance management to expel partners.

The outcome of this case has therefore shown that the test for justification of direct discrimination is narrower than for indirect discrimination. Direct discrimination can only be justified on public interest grounds which are distinguishable from purely individual aims, and here 2 legitimate social policy areas identified by the ECJ applied; staff retention and workforce planning fell under inter-generational fairness and limiting the use of performance management to expel partners fell under the legitimate aim of dignity.

HOMER –V- CHIEF CONSTABLE OF WEST YORKSHIRE POLICE

Homer began working for the Police National Legal Database at the age of 51. At that time there was no requirement for a law degree provided that you had other qualifications and skills and experience; which Homer had.

In 2005 in an effort to attract and retain legal advisors a new graded career structure was implemented. This meant that the top grade required a law degree. Homer applied for the top grade but was rejected due to the law degree criterion being necessary. In order for Homer to get a law degree he would have had to embark on it on a part time basis whilst working which would have taken at least 4 years. At the time of the new requirement Homer was 62 and therefore he would not have had time to do the course before the normal retirement age of 65 (this case was before the abolition of default retirement ages), and so he was unable to get the benefits of the promotion because of this criterion. Therefore Homer brought a claim for indirect age discrimination as he had been subject to a provision, criterion or practice which put persons of his age group (60-65) at a particular disadvantage compared with younger age groups in that they could not achieve the qualification before retirement.

The Tribunal held that to hold a law degree was not proportionate as there could have been a reasonable alternative. The employer appealed to the EAT. The EAT felt that Homer was not at a disadvantage as all those without a degree were treated the same way, and that any disadvantage was an inevitable consequence of age rather than age discrimination. Homer appealed the decision to the Court of Appeal who dismissed it on the basis that any disadvantage was from his impending withdrawal from the workplace and the same would be for anyone leaving for another reason. Homer appealed to the Supreme Court.

The Supreme Court allowed the appeal. Lady Hale stated that the disadvantage was one suffered by a particular age group for a reason related to age. There is a material difference between leaving the workplace because of retirement and leaving for other reasons as generally with the latter there is an element of choice, however retiring under a default retirement age provision gives no choice.

However as to the justification, which is the recruitment and retention of high calibre staff, and whether it was a legitimate aim, it would be necessary to review whether the employer’s application of the criterion to existing employees was appropriate? This would depend on if there were non-discriminatory alternatives. The Tribunal did not address this the first time round and therefore the case has been sent back to the Tribunal to consider whether the employer has adequately justified the discriminatory requirement.

For further information or advice on any of the issues outlined in this e-Brief, please contact a member of the employment team.