The Supreme Court today ruled against a former equity partner who had brought an age discrimination case against his law firm for unlawfully making him retire aged 65. It sent the case back to the Employment Tribunal to decide an issue that remains outstanding.

The Supreme Court ruled that the retiring of partners was a ‘legitimate business aim’ so that younger solicitors at the firm could take up their places in the partnership and so that the firm could retain talented lawyers who might otherwise move elsewhere to gain promotion. It was, the court ruled, ‘a proportionate means of achieving a legitimate aim’.

However, the Supreme Court, mirroring an Employment Appeal Tribunal finding in 2009, has remitted the case back to the Employment Tribunal to decide whether choosing the age of 65 years for retirement was proportionate, since there was no evidential basis for assuming that performance would drop off at that age. The ruling is likely to have wide-ranging implications for how firms may legitimately require equity partners to step aside for business planning reasons.

The case came to the Supreme Court after Leslie Seldon, a former civil litigation equity partner at Kent firm Clarkson Wright & Jakes (CWJ), had argued at a 2008 Employment Tribunal, a 2009 Employment Appeal Tribunal and the Court of Appeal in 2010 that the default retirement age (now abolished) applied to employees only, and not to equity partners who are effectively self-employed. Seldon has now been unsuccessful in all four applications.

The Equality and Human Rights Commission supported Seldon. Supreme Court justices Lords Hope, Hale, Brown, Mance and Kerr heard the case.

John Wadham, general counsel, Equality and Human Rights Commission said the judgment should remind employers that a worker’s age is not shorthand for their competence and should never be used in that way. ‘An employee’s ability to do a job should not be based on out of date assumptions about what people can do as they get older.

‘Every employer must think carefully about whether it really needs to have a policy that directly or indirectly discriminates against people based on their age. The court has made it clear that such policies must be justified on a case-by-case basis. An employer or partnership must be sure that the same aim couldn’t be achieved using a less discriminatory approach.’

City firm Stewarts Law employment partner Arpita Dutt said the judgment 'provides some clarity that where businesses are seeking to maintain reliance on a particular retirement age for some or all of their employees, their objectives must be readily identifiable and of a public interest nature, which would include sharing out professional employment opportunities fairly between the generations. Unfortunately, the judgment leaves open the big question of whether 65, 70 or any other age would be a justifiable retirement age.

'The reality for many businesses is that they have abolished any fixed retirement age and are instead choosing to rely on performance management procedures. Today’s judgment does not give a green light to move away from this practice.’

National firm Russell Jones & Walker employment partner Clive Howard said: ‘The Supreme Court decision in Seldon is disappointing given the recent abolition of the forced retirement of employees, since it upheld that a partner at a law firm could, in principle, be forced to retire at a given age. This would appear to undermine the government's decision to abolish retirement ages in the first place.

'However, employers should not form the view that this means it will be lawful to force staff to retire at 65 up and down the country. There were specific factors which applied to this small law firm in Kent, which will not be relevant to every organisation. The Supreme Court has asked the Employment Tribunal to consider whether the retirement age of 65 was justified on the facts of this case.’