The recent Tribunal decision in Mr M L Scott v Walker Morris LLP serves as a stark reminder to employers of the challenges surrounding mandatory retirement policies. Walker Morris, a top-100 law firm, was found to have unlawfully discriminated against a senior partner by forcing him to retire at 63. Martin Scott, the former head of the Construction and Engineering department, brought claims for direct and indirect age discrimination against his former firm and the Tribunal unanimously ruled in his favour.

Background

Mr Scott worked at Walker Morris for 40 years, he became a partner in 1992 and an equity partner in 1997. In 2018, the firm introduced a retirement policy requiring employees over 60 to make an application to continue working, applicants had to demonstrate that their contribution to the firm was of an ‘exceptional nature’. The policy also stipulated that equity partners had to relinquish 10% of their equity for each additional year they remained at the firm beyond 60. Partners over this age could, however, apply for a three-year extension to their tenure. Interestingly, Mr Scott reportedly voted in favour of the retirement policy when it was first introduced.

Mr Scott made an application at 60 and successfully secured a three-year extension after the firm recognised his ‘exceptional contribution’. However, once the three years lapsed, Mr Scott made a second application which was denied, forcing him to retire. The firm rejected the application on the grounds that no succession plan had been put in place.

At the Tribunal, Walker Morris sought to justify the policy by arguing that it was designed to create opportunities for younger lawyers and address ‘intergenerational unfairness’. The firm’s former managing partner also suggested that the performance of ‘many, or even most, partners’ declines later in their careers.

Decisions

The Tribunal found that Mr Scott would not have been treated the same way if he had been under 60 and concluded that the policy amounted to less favourable treatment due to age. Crucially, the policy was not deemed a proportionate means of achieving the firm’s stated objectives because the firm were unable to provide sufficient evidence.

While the Tribunal accepted that promoting intergenerational fairness could be a legitimate aim for a retirement policy, it found no evidence to suggest that requiring partners over 60 to retire and relinquish equity was necessary to achieve this. The Tribunal also determined that the firm had given little consideration to alternative approaches. Ultimately, the Tribunal held that the firm’s approach was based on ‘discriminatory assumptions’ rather than being substantiated by objective evidence.

Lessons for employers

This case can be considered alongside Seldon v Clarkson Wright and Jakes, which similarly involved a partner who was forced to retire. Mr Seldon appealed the case to the Supreme Court, which determined that the firm’s justifications (business planning and retention) were legitimate, as they promoted intergenerational fairness and dignity.

Following this, the case was referred to the Tribunal to assess whether the specific retirement policy in question was a proportionate means of achieving these aims. The Tribunal considered whether the retirement age was set so low that the partner would simply move to a different firm to continue working, or so high that it would discourage younger colleagues from remaining at the firm because of concerns over career progression. The Tribunal also took into account that the partners had agreed to the mandatory retirement age in the partnership deed.

The Tribunal found in favour of the employer, holding that retention and planning were legitimate aims. Importantly, the compulsory retirement age was 65 which aligned with the state pension age at the time and the Tribunal specifically advised that its conclusion might have been different if the compulsory retirement age had been repealed (which has now happened).

Both cases highlight that Tribunal decisions are highly fact-specific, requiring employers to provide clear evidence to support the rationale behind such policies. Any policy that disproportionately affects employees with a protected characteristic is inherently discriminatory and must be carefully considered before implementation. Employers must evaluate whether the policy can be objectively justified as a proportionate means of achieving a legitimate aim and ensure that this justification is robustly supported by evidence.

How we can help

For further information, or to discuss the issues raised within this case, please contact us to speak to a member of our Employment Team.