United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR RICHARD O'DAIR (of Counsel) Instructed by: Messrs B P Collins Solicitors Collins House 32-38 Station Road GERRARDS CROSS Bucks SL9 8EL
For the Respondent	MR THOMAS CROXFORD (of Counsel) Instructed by: Messrs Clarkson Wright & Jakes Solicitors Valiant House 12 Knoll Rise ORPINGTON Kent BR6 0PG
For the Intervenor	MR DECLAN O'DEMPSEY (of Counsel) Instructed by: Equality and Human Rights Commission Arndale House The Arndale Centre MANCHESTER M4 3AQ

SUMMARY

AGE DISCRIMINATION

A partnership had a provision in the Partnership Agreement which required partners to resign at 65 (although they could be kept on by agreement). The claimant alleged that this was age discrimination. The Employment Tribunal found that although the provision constituted direct age discrimination, it was justified. In part this was found on an assumption that performance tails off at around this age. The claimant appealed on various grounds, and the Equality & Human Rights Commission was permitted to make representations as interveners.

The EAT dismissed all the grounds save one, namely that the assumption that performance dropped off at 65 was not supported by any evidence and involved stereotyping. In principle, such a rule could be justified, but it was not justified in this case. Matter remitted to the same Tribunal to consider whether the need to achieve the other legitimate aims was sufficient to justify the rule. Observations on the test for justification in direct age discrimination.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. Mr Seldon, who we shall refer to as the claimant, as he was below, appeals from the decision of the Employment Tribunal which dismissed his claim for unlawful direct age discrimination. He was a partner in a solicitors firm who was compulsorily retired in accordance with the terms of the partnership deed at the end of the year following his sixty-fifth birthday. The Tribunal concluded that he had suffered adverse treatment as a consequence of his age, but that the treatment was justified.

The background.

2. The respondent is a regional firm of solicitors based in Orpington in Kent. It consists in the usual way of trainees, solicitors, associates, salaried partners and equity partners. Profit sharing amongst the equity partners is on the basis of a lock step leading to parity within a few years.
3. Mr Seldon joined Clarkson Wright and Jakes ("CWJ") as a solicitor in 1971. He was appointed an equity partner the following year and remained in that position until his retirement on 31 December 2006.
4. Mr Seldon was a signatory to a deed of partnership on 19 March 1992. This provided, inter alia, for the removal from the partnership only on certain specific grounds. These did not include any power for an equity partner to be expelled on the ground of poor performance. The deed provided that each equity partner who had attained the age of sixty-five years was to retire on the 31 December following.
5. Mr Seldon anticipated that he would be retiring and entered into discussions during May and June 2005 with a view to being allowed to work part time for the firm after retirement. From about that time the Tribunal found that he was winding down his legal practice. He was, with the knowledge and consent of the other partners, pursuing leisure and other activities, such as taking time off to play golf. On 1 July 2005 he handed over responsibility as head of the commercial and civil litigation department to Ms Mehlin.
6. In August 2005 offers of partnership were made to three existing salaried partners. A new deed of partnership was signed on 31 December 2005. In all material respects, this was similar to the 1992 deed. It repeated the provision about retirement, although an equity partner could continue as a partner after the age of 65 with the consent of the other partners.
7. On 3 March 2006 Mr Seldon produced a document in which he set out his intentions behind his proposal that he should continue to work part time as a consultant after retirement. He said:

"No charity asked for – I'd like to think this is an entire fair commercial deal! I won't invoke age protection legislation – if my services are not needed then the firm has only to say this and I will accept the decision."

8. The offer was declined, and Mr Seldon was told this on 27 April 2006. He was, however, offered £30,000.00 gratuitous payment for his services to the firm. Subsequently he took legal advice, and indicated that contrary to his earlier position, he did intend to take an age discrimination claim against CWJ.
9. In a letter dated 15 November 2006 he stated that he wished to carry on working full time for CWJ. That was also inconsistent with the position he had earlier adopted. He ceased to be an equity partner on 31 December 2006 and brought proceedings before the Employment Tribunal.
10. The Tribunal heard evidence over four days and it spent a considerable period of time on its deliberations. It produced a very detailed and careful judgment to which we pay tribute. The Tribunal identified certain specific reasons which it considered to be legitimate objectives for the partnership to seek to attain. These were:

(a) ensuring that associates were given the opportunity of partnership after a reasonable period as an associate, thereby ensuring that associates do not leave the firm;

(b) facilitating the planning of the partnership and workforce across individual departments by having a realistic long term expectation as to when vacancies will arise, and

(c) limiting the need to expel partners by way of performance management, thus contributing to the congenial and supportive culture in the firm.

11. The Tribunal then considered whether the retirement clause was a proportionate means of achieving the aim, and it concluded that it was. We analyse their reasoning in greater detail below.

The legal framework.

12. Council Directive 2000/78/EC establishes a general framework for equal treatment in employment and occupation. This is the framework Directive which sets out the core principles
    

of EU law. Some of the recitals have been relied upon in this case, together with relevant provisions of the Directive:

"Whereas …

…

(14) This Directive shall be without prejudice to national provisions laying down retirement ages.

…

(25) The prohibition of age discrimination is an essential part of meeting the aims set out in the Employment Guidelines and encouraging diversity in the workforce. However, differences in treatment in connection with age may be justified under certain circumstances and therefore require specific provisions which may vary in accordance with the situation in Member States. It is therefore essential to distinguish between differences in treatment which are justified, in particular by legitimate employment policy, labour market and vocational training objectives, and discrimination which must be prohibited.

…

Article 1: Purpose

The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.

Article 2: Concept of Discrimination

1. For the purposes of this Directive, the 'principle of equal treatment' shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1.

2. For the purposes of paragraph 1:

a. Direct discrimination shall be taken to occur when one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds referred to in Article 1;

b. Indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would put persons having a particular religion or belief, a particular disability, a particular age, or a particular sexual orientation at a particular disadvantage compared with other persons unless:

i. that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary …

Article 6: Justification of differences of treatment on grounds of age

1. Notwithstanding Article 2(2) Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary …"

13. The Age Regulations seek to give effect to the Directive. Insofar as is material, they are as follows:

"3. Discrimination on grounds of age

(1) For the purposes of these Regulations, a person ("A") discriminates against another person ("B") if –

(a) On grounds of B's age, A treats B less favourably than he treats or would treat other persons, or

(b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but –

(i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons, and

(ii) which puts B at that disadvantage,

And A cannot show the treatment or, as the case may be, provision, criterion or practice to be a proportionate means of achieving a legitimate aim.

17. Partnerships

(1) It is unlawful for a firm, in relation to a position as partner in the firm, to discriminate against a person –

…. (d) in a case where the person already holds that position –

(i) in the way they afford him access to any benefits or by refusing to afford, or deliberately not affording, him access to them; or

(ii) by expelling him from that position, or subjecting him to any other detriment."

Regulation 30 provides for an exception with respect to employees. They may be retired at the age of 65. There is a case currently before the ECJ in which the legality of that provision is challenged: The Incorporated Trustees of the National Council of Ageing v Secretary of State for Business, Enterprise and Regulatory Reform (the "Heyday case") (Case C-388/07). The Advocate General has expressed the opinion that it is in principle lawful but the full Court has yet to pronounce on the subject. The provision does not apply to partners, however, and therefore does not resolve this case.

The Tribunal decision.

14. The Tribunal decision is an impressive and clear analysis of the facts and the issues. It is perforce very lengthy. We will try and draw out the principal findings sufficient to explain the grounds of appeal.
15. There were a number of issues which the Tribunal resolved and which are not now the subject of an appeal. It accepted that the non-renewal of the partnership amounted to an expulsion from the office within the meaning of regulations 17(1) and 17(8), and that this act of expulsion was less favourable treatment on grounds of age in that a younger man would not have been required to resign in that way. The burden of justifying the age discrimination therefore fell squarely on the respondent. The crucial issue, which is the subject of this appeal, is whether there were legitimate aims and if so whether the means designed to achieve them were proportionate.
16. The Tribunal accepted that there was no evidence that the aims relied upon before them had ever been discussed or debated by the partners. Indeed it was not clear when the compulsory retirement age had first been agreed; it always appears to have been part of the partnership deed.
17. The respondents put forward six aims which they relied upon as potentially legitimate

aims. These were:

"a) Ensuring that associates are given the opportunity of Partnership after a reasonable period as an associate thereby ensuring that associates do not leave the firm

b) Ensuring that there is a turnover of Partners such that any Partner can expect to become Senior Partner in due course

c) Facilitating the planning of the Partnership and workforce across individual departments by having a realistic long term expectation as to when vacancies will arise

d) Limiting the need to expel Partners by way of performance management thus contributing to the congenial and supportive culture in the firm

e) Enabling and encouraging employees and Partners to make adequate financial provision for their retirement

f) Protecting the Partnership model of the (firm). If equity Partners could not be forced to retire at 65 but employees (including salaried partners) could be it would be preferable to keep lawyers at the (firm) as employee or salaried partners rather than Partners."

18. The Tribunal considered that three of these aims could be justified, namely (a), (c) and (d) but the others could not. The justification for these three aims was stated to be as follows. First, with regard to aim of ensuring that associates do not leave the firm, the Tribunal said this:

"51.3 …..Not promoting a solicitor to become an associate may result in the solicitor seeking his or her future elsewhere. Having attained the status of associate he or she will have an eye upon further advancement.

51.4 The firm is divided into departments specialising in particular aspects of legal professional practice. An associate with ambitions to become a Partner might leave the firm if he or she did not see a prospect of further advancement within the department within a reasonable time.

51.5 For the firm with a strategy for growth and the preservation of a reputation for the quality of its legal services, the retention of associates (as well as all other able solicitors) with the potential to achieve Partnership has been and remains an aim of the Partners."

19. It also pointed out that the expectation for younger employees to achieve advancement was accepted as a legitimate policy objective by the Court of Appeal in Secretary of State for Trade and Industry v Rutherford [2005] ICR 119, a case in which it was alleged that the law which prevented employees claiming unfair dismissal over the age of 65 discriminated against men.
20. Then, with respect to the aim of facilitating the planning of the partnership by having realistic long term expectations, the Tribunal noted that solicitors, including partners, were relatively mobile and added this:

"53.3 Whether a solicitor decides to make his or her career with the firm will be governed not only by his or her perception of the firm and its future, but also by his or her assessment of the likelihood of advancement within the department in which he or she works. The latter is bound to involve looking at the composition of the department and assessing when vacancies might arise for new associates, salaried partners and Partners. Such an assessment cannot be an exact science because advancement within the firm is not exclusively stepping in to 'dead men's shoes'. The growth of the practice may of itself allow additional appointments to be made. Nor does it take account of unanticipated vacancies. But it is inevitable that the solicitor will consider when the Partners in his or her department are due to retire and therefore when vacancies will occur. Ms Mehlin said she did so.

53.4 The Tribunal took the view that the short and long term planning of the requirement for professional staff within the departments was and remains an aim and that such aim is facilitated by solicitors (or at least those who have aspirations for advancement) having, among other things, an expectation as to when vacancies within the Partnership will arise. Accordingly the Tribunal was satisfied that this was a legitimate aim of the Partnership."

21. Finally, the Tribunal considered that the rule contributed to a congenial and supportive culture in the firm. There was no rule permitting the firm to expel underperforming partners, notwithstanding that the firm had experienced this problem in the early 1990s. The Tribunal referred to a paper by Professor Stephen Mayson, who wrote an academic article on the subject of underperformance. He stated that it would typically take three years to establish that an underperforming partner was incapable of improvement. This could be achieved by a performance management procedure. The Tribunal then added:

"54.4 It is such a performance management procedure that the Partners did not introduce. That is not to say it is the only model that they could have considered.

54.5 Solicitors who enter into private practice have a choice as to the manner in which they choose to practise. Many will prefer to join a large international or global firm that is run on corporate lines; some join firms where the culture is 'eat what you kill' where partners take a share of profits based upon the fees they personally generate; others prefer to join firms where there are demanding targets and a rigorous performance management such that a failure to achieve results could mean a reduction in profit share or expulsion. Then there are solicitors for whom the relationship between Partners is more important than the achievement of business targets. They prefer to practise their profession in a collegiate and supportive atmosphere perhaps with less intensity. They may consider that in doing so they achieve a better work/life balance. As partners they may value friendship between the partners and prefer a close association not only among the partners but extended to their families. They may hope and expect that partners will be supportive if or when the need arises. In such a way like minded solicitors are drawn together in to partnership. Such was the case with the Partnership in this case. Partners sought to create a congenial and supportive 'culture'. While it might be considered to be a more traditional approach to the profession, the Tribunal is satisfied that there is no reason why the Partners in this case should not have chosen to adopt such a culture. It was clearly important to them and, as such, amounts to an aim as it is directly connected to the professional practice that the Partnership is running.

54.6 It is understandable that the power to expel a Partner as the final sanction under a performance management procedure was not considered to be consistent with the creation and maintenance of a congenial and supportive culture."

22. Having identified the legitimate aims, the Tribunal then considered whether the particular compulsory retirement provision were necessary to achieve those aims and whether they were proportionate. As to the former, they considered that the evidence supported the view that compulsory retirement played a significant part in the retention of associates. They had no doubt that it would undermine the effort to retain associates if they were told that partners could remain until voluntary retirement or the expulsion of a partner. They recognised that associates may be advanced to salaried partners without there being a vacancy, but no doubt appreciated that there must be a limit to the number of partners who can be appointed in this way.
23. They also considered that it contributed to a congenial and supportive culture that an under-performing partner did not suffer the indignity of being expelled from the partnership for poor performance. A principle under which partners could be expelled for poor performance would not be consistent with such a culture. The current rule enabled a partner close to retirement age who was underperforming to coast to retirement without any adverse consequences.
24. As to the issue why the age of 65 was chosen as the date of compulsory retirement, the Tribunal said this:

"It is also not unreasonable to assume that some partners who have reached the age of 65 are not able to make as great a contribution as they had done in the past. In the absence of a compulsory retirement age it will become necessary to confront such a person with his or her underperformance."

25. They then turned to the issue of proportionality. They considered whether the removal of under-performing partners could be achieved by any alternative measures. They rejected the notion that a performance management procedure of the kind to which we have referred would achieve the same objective because of its adverse effect upon the culture of congeniality. Moreover, they were doubtful whether it would work successfully in a small partnership because a partner is unlikely to accept criticism readily from other partners who are regarded not only as professional colleagues but also as friends.
26. They also rejected the notion that partners would be happy to leave if they were told their contribution to the firm was not satisfactory. They recognised that the compulsory retirement had a significant effect upon the retiring partner, but they noted that compulsory retirement did not occur without warning, and it was possible to plan for the financial consequences.
27. They also had regard to the fact that the partners had agreed a compulsory retirement age between themselves. They recognised that this did not mean that there were no adverse effects, but felt that it was a factor to be weighed in the balance. Here were parties of equal bargaining power agreeing between themselves what appeared to be a sensible and acceptable set of provisions. It is not akin to the position of an employee subject to a contract of employment who is perforce in an unequal relationship with his employer.
28. The Tribunal summarised its conclusions as follows:

"The Tribunal are unanimous in their conclusion, having carried out the balancing exercise between the needs of the Partnership and the impact of compulsory retirement and on the basis that the 'rule' for retirement at age 65 applies to all Partners irrespective of personal circumstances, that the compulsory retirement age is a proportionate means of achieving the maintenance of a congenial and supportive culture within the Partnership by avoiding the need to confront or expel Partners who are underperforming at or about the time they would otherwise have been required to retire and further of encouraging associates and other professional staff to remain with the firm with a view to advancement."

The grounds of appeal.

29. There are 22 separately identified grounds in the appeal, not all of which were in fact pursued orally, and some of which were challenging findings of fact. We think that those meriting consideration can fairly be analysed under the following heads:

(1) The Tribunal did not adopt the correct test for justification. In this regard the claimant relied upon the submissions advanced by the Commission. It was submitted that there should have been very weighty considerations before the Tribunal could find direct discrimination established.

(2) In any event the employers could not rely upon legitimate aims which were not in their minds when the rule was adopted or confirmed.

(3) The Tribunal erred in simply asking whether the rule itself was capable of justification. In the case of direct age discrimination, it is necessary to focus on the particular treatment of the claimant and to ask whether in his or her particular circumstances the treatment meted out to him was justified. Had that been done, there would have been a different conclusion. In this case it was highly relevant that there were no associates waiting in the wings for promotion. This meant that it was not necessary to require the claimant to resign to liberate a post.

(4) The Tribunal erred in treating as relevant the fact that the partnership rule was agreed between the partners.

(5) The objective of encouraging associates to stay could have been achieved by a different and less discriminatory rule. For example, a partner could have been required to resign after the age of 65 on twelve months' notice if this was necessary to accommodate the desire to promote an associate to a partnership. This was a matter which was raised before the Tribunal but they did not address it, as they ought to have done. Similarly, with respect to the argument that it was invidious to have to go through a performance route for those over 65, there was the alternative of negotiating a solution as currently was the practice where a younger partner was under performing. Alternatively, the partners could have been subject to a system of performance management. In rejecting this as a possibility because of its effect on collegiality, the Tribunal had no proper factual basis for its conclusion.

(6) The Tribunal erred in finding the aim of collegiality was properly established. First, it was not capable of being a legitimate aim because it was not in any way linked to business efficiency. Second, even if it was in principle a legitimate aim, there was no justification established for fixing the age at 65. Indeed, such evidence as there was suggested that for a job of this nature, performance did not fall off until the age of 70. It was for the respondent to establish the evidential basis of their case, and they had not done so. Furthermore, there was no evidence that any significant number of partners would wish to remain beyond the age of 65 to make this a practical problem.

30. The Commission made submissions with respect to most of these grounds but focused on issues of principle rather than their application to the facts of the case. We shall deal with the grounds in turn:

(1) The correct test for justification.

The Commission submitted that the proper test for assessing justification in the context of direct age discrimination was different to the standard applicable when considering indirect discrimination. Tribunals ought to direct themselves that there should be "very weighty considerations" to justify direct discrimination. Alternatively, they should recognise that such justification will be very exceptional. The argument was advanced in the following way.

31. The criterion set out in Article 6, adopted in the Directive for determining whether direct age discrimination is justified uses a different formula to that adopted either with respect to indirect discrimination in Article 2, or the genuine occupational requirements in Article 4.
32. The test under Article 6 is whether the legitimate aim is "objective and reasonable" whereas in the other two Articles it is sufficient that it is objective. The reference to "objective and reasonable", observes Mr O'Dempsey, replicates the language used in Article 14 of the European Convention of Human Rights. That is the provision which renders certain forms of discrimination unlawful under that Convention. The case law of the European Court of Human Rights makes it plain that in circumstances where the discriminatory grounds are actually specified in Article 14, any justification for the discrimination can only be on the premise that there are very weighty considerations to justify it: see Van Raalte v Netherlands (1997) 24 EHRR 503.
33. There is a much looser test with respect to those forms of discrimination which are not specifically identified in Article 14, and age is one of them. For these innominate forms of discrimination a lower standard, akin to that adopted with respect to indirect discrimination under EU law, is applied.
34. However, Mr O'Dempsey submits that it would be inappropriate to adopt that test here because under EU law itself, age discrimination is specifically identified as one of the key forms of discrimination which are to be outlawed. He relies, as did the claimant, on the fact that the purpose behind the discrimination laws is, at least in part, to uphold human dignity and autonomy.
35. Accordingly, he submits that the intention of the draftsman must be that with respect to Article 6 the court should adopt the test used by the European Court of Human Rights but as that test would be employed with respect to the specified grounds and not the innominate grounds. On this basis the guidance to be given by this Tribunal should be that employment tribunals should only allow age discrimination where there are weighty considerations to displace the normal presumption that any such direct discrimination is unlawful. Mr O'Dempsey submits that the alternative, which is not acceptable, is to treat the words "and reasonable" in Article 6 as being redundant and adding nothing to the normal justification test.
36. We do not accept this argument, which we consider to be tenuous. It is putting very considerable weight on the phrase "objective and reasonable". Mr O'Dempsey was not able to identify any reference in the travaux preparatoires which indicated an intention specifically to adopt the same test as is used by the European Court of Human Rights. Moreover, in our judgment, it is very telling that when looking at the test of justification, Article 6 of the Directive employs the same concepts of legitimate aim and proportionality ("appropriate and necessary") as is used in Articles 2 and 4.
37. We accept Mr Croxford's submission. The addition of the word "reasonable" adds nothing to the concept. The reasoning suggests that in indirect discrimination there could be justification for a provision, criterion or practice which was objective but unreasonable. We doubt whether this was the draftsman's intention.
38. Furthermore we think that there is an understandable reason why "objective and reasonable" has been used. Direct discrimination is concerned with treatment, whereas indirect is concerned with the effects of an apparently neutral provision which in practice creates adverse effects.
39. As Mr Croxford points out, it is perfectly natural to describe the provision as objective, but it more natural to describe treatment as reasonable. In any event, whether that is so or not, it is frequently the case that the language used in directives is not consistently employed as between particular provisions. The minor difference in this case does not, in our view, begin to bear the weight of argument which Mr O'Dempsey seeks to place upon it.
40. We do not, therefore, accept that the test with respect to direct age discrimination is fundamentally different to that which applies to the other forms of discrimination. Nothing in domestic law requires a different test and we do not believe that the Directive does either.
41. Nor do we accept that it is appropriate that Tribunals should direct themselves that it is only in very exceptional cases that direct age discrimination should be permitted. It may be the case that, in practice, direct age discrimination can only exceptionally be justified, but that is of no assistance when looking at the issue of justification in any particular case. We think a tribunal would err in law if it were to direct itself that since the circumstances of a particular case do not seem to be exceptional, justification cannot be established. It must apply the normal principles of legitimate aim and proportionality.
42. That is not to say that there is no distinction at all between direct and indirect discrimination in relation to the application of the concept of proportionality. As this Tribunal has stated in other case, the overall discriminatory effect of a measure will necessarily be greater when there is direct as opposed to indirect discrimination: see MacCulloch v Imperial Chemical Industries [2008] ICR 1334 para 12, and this will be a material factor to bear in mind when applying the test of proportionality. However, this is not applying a different concept, but simply recognising that the application of the concept may vary with the form which the discrimination takes.
43. We should add that the Commission also relied upon the fact that in the case of Elias v Secretary of State for Defence [2006] 1 WLR 3213 the Court of Appeal emphasised that where the nature of discrimination was akin to direct discrimination, then a particularly high standard of scrutiny was required in order to justify that indirect discrimination. It is submitted that a similar approach ought to be adopted with respect to direct age discrimination.
44. We reject that, for the simple reason that the age discrimination legislation permits direct discrimination. The point about the Elias case is that the rule there adopted was akin to a form of discrimination, namely on grounds of national origin, in which direct discrimination cannot be justified. If the rule brings about a situation where those disadvantaged almost entirely replicate those who would be disadvantaged by a direct application of discriminatory criteria which cannot be justified, then the weight of justification must necessarily be very heavy. That is not this case.
45. Since the hearing, the Advocate General has given his opinion in the Heyday case. The parties have made brief written submissions on it. In our judgment, it is consistent with the conclusion we had already reached. One of the issues there was whether there was a different test of justification for direct and indirect discrimination. The Advocate General specifically rejected an argument that the addition of the word "reasonably" altered the test for justification (see para 79). Of course, the Court may take a different view, but we find some comfort in that ruling which reinforces our own analysis.

(2) Need the legitimate aims have been consciously recognised at the material time?

46. A related point was that in any event there can be no justification at all where the firm had never considered the impact of the age discrimination legislation nor addressed the justification for the policy it has adopted.
47. We have no hesitation in rejecting this submission. It is important that tribunals do not see a finding of discrimination as a form of punishment because they consider that the employer's procedures are unsatisfactory, or that the commitment to equality is poor. In a different but related context, the EAT (Underhill J presiding) observed in D'Silva v NATFHE [2008] IRLR 412 (para 38) that the mere fact that an employer does not have an equal opportunities' policy or fails adequately to respond to a questionnaire is not of itself a basis for establishing sex discrimination in any particular case, although it may in an appropriate case provide evidence supporting an inference of discrimination.
48. As the courts have stated on a number of occasions, it will sometimes be more difficult for an employer to justify ex post facto a provision or policy which has a discriminatory effect in circumstances where there was no conscious understanding of those effects at the time the provision or policy was adopted.
49. The Elias case is a good example. As we have said, the Secretary of State sought to justify a provision concerning the payment of money to Japanese prisoners of war, the effect of which was almost equivalent to discriminating directly on grounds of nationality and national origin. The Department had given no thought to this and had not considered whether any less discriminatory means could be adopted. It is easy to see why in those circumstances Mummery LJ in the Court of Appeal took the view that the burden on the employer is going to be a particularly difficult one (paras128-133), but it never becomes impossible. Indeed, as the ECJ has held in Schonheit Daht v Frankfurt Ohman [2004] IRLR 983, as approved in Crossley v British Airways [2005] IRLR 423, a discriminatory measure may be justified by a legitimate aim other than that which was specified at the time when the measure was introduced.
50. We see absolutely no justification whatsoever at all for saying that where the discrimination is direct, some different principle should apply. There is no rationale or logic, or indeed any fairness, in such a principle. It must have been plain to those adopting this rule that it discriminated on grounds of age, and they would no doubt have had their reasons for agreeing to it nevertheless. Those reasons can no longer be discerned through the mists of time, but that does not mean that they were not present. A tribunal is entitled to look with particular care at alleged aims which in fact were not, or may not have been, in the rule maker's mind at all. But to treat as discriminatory, what might be a clearly justified rule on this basis would be unjust, would be perceived to be unjust, and would bring discrimination law into disrepute.

(3) The significance of consent.

51. Mr O'Dempsey contended that Article 16 makes it clear that it was not possible by agreement effectively to contract out of the right to a principle of non-discrimination. That is plainly correct, but that is not what the Tribunal did. The Tribunal stated in terms that the fact that a term has been agreed by all the partners, or even a generation of partners, does not mean that it can be assumed to be justified.
52. We think it is a legitimate consideration that a rule of this kind was agreed by parties with equal bargaining power. Furthermore, to the extent that the rule has benefits for the partnership as a whole, the retired partner may have derived some advantage from that provision during the period when he was an equity partner.
53. We think there is an analogy with the case of Bridge v Deacons [1984] AC 705 where the Privy Council have held that public policy would allow a far greater restriction on the freedom of partners to compete following their retirement or removal from the partnership than would be the case with employees. The reason is that a rigorous clause which limits the freedom of the leaving partner will benefit the partners who choose to remain. A partner may at different stages, and depending upon whether he is a remaining or a leaving partner, take the benefit or suffer the detriment of the clause. Similarly here: we think that the principle of justification which, after all, seeks to look at all the circumstances, should in principle take into account the fact that the partners must have perceived the rule to be in their collective interests.
54. In addition, the ECJ has accepted that in assessing justification it is appropriate to have regard to the fact that a particular rule was agreed in the process of collective bargaining: see Palacios de la Villa v Cortifel Servicios SA [2007] IRLR 989 para 53. It is true that that was in the context of national rules providing for compulsory retirement rather than those adopted by an individual firm or company. However we see no reason in principle why they should not be relevant here. As the EAT (Elias P) observed in Loxley v BAE Land Systems Ltd [2008] ICR 1348 para 42, whilst the fact that a rule is agreed does not render an otherwise unlawful scheme lawful, a tribunal will rightly attach some significance to the fact that the collective parties have agreed to a scheme which they consider to be fair. Similarly, where the issue concerns partners, we think that weight can appropriately be given to the partners' own perceptions of their interest as reflected in the partnership agreement.

(4) Focussing on the particular treatment.

55. The Commission and the appellant advance a totally different objection to the Tribunal's approach. They submit that when looking at whether direct discrimination can be justified, it is necessary to focus solely on the individual treatment meted out to the claimant and not to consider any underlying rule of which that treatment is a specific manifestation. In other words, in this context the issue of justification should be considered not by determining whether the rule itself has legitimate objective and is proportionate, but rather whether the specific decision to retire this partner in the particular circumstances then prevailing could be justified. The appellant submitted that it was not justified because there was no associate waiting to be promoted. Hence the age discrimination served no useful purpose.
56. It is submitted that this approach is dictated by the clear distinction in the language between direct and indirect discrimination, namely that the one relates to "treatment" and the other to "provision, criterion or practice". It is not suggested that the application of the rule itself need not be justified; the argument is that its application in the particular circumstances must be as well.
57. Mr Croxford submits that the language in the regulations does not dictate this result. The use of the word "treatment" when dealing with direct discrimination and "provision, criterion or practice" when considering indirect is necessarily adopted since indirect discrimination is only manifest where there is a neutral provision, criterion or practice which has had an adverse effect. Mr Croxford relies again upon the Palacios case in the ECJ where a discriminatory national rule found in a collective agreement providing for compulsory retirement was held to be justifiable. There was no suggestion that each time that rule was employed it had to be specifically justified in the particular circumstances.
58. We do not foreclose the possibility that there may be cases where the particular application of the rule has to be justified, but we suspect that they will be extremely rare. Typically, legitimate aims can only be achieved by the application of general rules or policies. The adoption of a general rule, as opposed to a series of responses to particular individual circumstances, is itself an important element in the justification. It is what gives predictability and consistency, which is itself an important virtue. The individual is then treated in accordance with the rule. As the EAT (Elias P) said in the McCulloch case, which concerned the operation of a redundancy payments scheme, "the reason for the claimant's treatment is the adoption and application of the scheme, and it is the aims of the scheme which must justify her particular treatment."(para.34).
59. Furthermore, if exceptions are made to the rule then in most surmisable circumstances that will undermine the efficacy of the rule itself and the objectives which it seeks to attain. Accordingly, provided it is justified in principle to have a general rule as a means to achieve an objective- and in practice it almost inevitably will be given that it ensures equality of treatment - it will virtually always be the rule itself which needs justification and not its application.
60. We agree that the rule should adopt the least discriminatory means of attaining the particular objective. In other words, if a general exception could be made, that would involve adopting a change to a less discriminatory rule. But that is not the objection being made here. It is said that even if the means employed are in general the least discriminatory, and even if the objective is justified, nonetheless there will be cases where a departure from the rule is feasible in an individual case and should be adopted because less discriminatory.
61. As we have said, we suspect that the need to create exceptions of this nature in order to prevent an otherwise justified rule unjustified in its application, will rarely if ever arise. We certainly do not think that this case provides an example. To permit the exception would potentially undermine the assurance that associates have that partnerships will become available; and we accept Mr Croxford's observation that it would be likely to undermine the aim of achieving collegiality amongst the partners. It would involve inconsistent and potentially inequitable treatment between partners because it would defeat.

(5) Less discriminatory policies.

62. Both the Commission and the appellant also emphasise the importance of the principle that if the particular objective could be achieved by adopting a policy which has a less discriminatory impact, then that policy should be selected. The principle as such is uncontroversial. The employer can not justify any greater discrimination than is reasonably necessary to achieve the objective being sought. That is plain from the definition of justification. The important point to note, however, is that this doctrine presupposes that the legitimate aims will not change.
63. In this case the appellant submits that there was no need to have had a compulsory retirement age at all. The appellant places weight on the fact that it would have been open to the partnership to have required a partner to give 12 months' notice if, but only if, there is a prospective partner in the wings so that a gap needed to be created. The current policy of automatically requiring retirement at 65 (subject to some extensions in particular cases) was not sufficient nuanced. It meant that a partner may have been required to cease work even although there was no immediate prospect of any other solicitor in the firm being ready or willing to take over the responsibilities of a partner.
64. This argument was never addressed by the Tribunal. (We do not criticise them for the oversight. There was a vast range of argument advanced below, and we do not know how significantly this particular argument featured in the appellant's case). In any event, we are satisfied that this policy would not wholly meet the partnership's aims. From the point of view of the associate, it would still leave some uncertainty as to whether the firm would be willing to give notice, given the unpleasantness that could accrue. Also it would place a prospective partner in a highly invidious position if he or she knew that the appointment would involve the compulsory retirement of someone who did not want to leave. It would also undermine collegiality since the decision by the other partners to offer a partnership would be made in circumstances where they would know that it would trigger compulsory retirement.
65. The appellant also submitted that the adoption of performance criteria, or negotiating with underperforming partners, would be less discriminatory. That is true, but the Tribunal expressly considered these alternatives and gave reasons why, in their view, they did not achieve the same objectives. Put succinctly, the former would jeopardise collegiality and the latter may not be successful. In our view, the Tribunal's conclusions on this matter were not perverse and this argument is simply trying to go behind the Tribunal's findings of fact.

(6) Was the aim of collegiality properly established?

66. The first submission here is that it is not even legitimate for a partnership to seek to conduct matters so as to achieve a congenial relationship amongst the partners. The appellant contended that promoting collegiality between partners was not a proper business objective, nor one designed to increase the efficiency of the business.
67. We wholly reject that argument. The equality laws are not designed to determine for companies what might be appropriate objectives. A business which places considerable weight on environmental or charitable objectives, even if they do not believe that they have only direct business benefit, can pray these in aid as legitimate aims.
68. Similarly, the desire to run the operation in a collegiate way and to structure the partnership agreement to achieve that effect is in our view manifestly a legitimate objective. In fact, Mr Croxford says that the evidence supported the notion that the creation of a congenial and supportive culture also contributed to the commercial identity of the firm and therefore had a commercial purpose. That may well be so but we think that quite independently of that, the aim was justified.
69. In that context we also accept that the Tribunal was entitled to conclude that an environment where partners would not, save in exceptional circumstances, be subject to disciplinary procedures in respect of under performance was an element which was directed to achieving that objective of collegiality. It is inevitably destructive of a congenial environment if one partner or group of partners can criticise the performance of another in circumstances which may lead to that partner's removal.
70. The issue then, however, is whether the particular rule was justified in the circumstances of this case. Both the appellant and the Commission submit that the rule adopted by the partnership involves stereotyping. The assumption underlying the rule is that as partners reach the age of 65 so there is a significantly greater risk that they will under perform. That, says the appellant, is an unjustified and discriminatory assumption. The partnership produced no evidence that partners of or around that age did have particular difficulties with under performance. Indeed, whilst there was evidence that they had formerly had problems with under performing partners, the age was not identified. Moreover, such admittedly sketchy material as was put before the Tribunal in fact suggested that the performance did not begin to tail off in posts of this kind until the age of 70.
71. We agree with this submission. It may well be that a partnership could establish that from its own experience partners did contribute less from a particular age. The pressures on a partner, particularly in a large firm, can be enormously stressful. It would not necessarily be surprising if there were to be general recognition that the contribution made by partners became less significant after a particular age. It may also be that the desire not to subject partners to a performance regime, possibly leading ultimately to expulsion, would justify imposing a general retirement age (which could in an appropriate case conceivably be below 65). However, there was no evidence to support the conclusion that 65 was the appropriate age in this case. Indeed, there are two aspects of the evidence which tend to undermine that argument.
72. The first is that a significant proportion of partners choose to leave voluntarily before reaching the retirement age. They therefore take themselves out of the equation. The second is that the partners can, in fact, retain somebody in the partnership over the retirement age by agreement. That does not fundamentally undermine an automatic retirement provision because there may be particular circumstances where the need for a partner to remain is strong, for example, to complete a particular piece of business which is plainly in the interest of the partnership. But it seems in this case that a partner might continue for some years after retirement age if the partnership considered that the contribution is sufficiently significant.
73. We do not accept the submissions of the appellant, and indeed repeated by the Commission, that a tribunal must always have concrete evidence, neatly weighed, to support each assertion made by the employer. Tribunals have an important role in applying their common sense and their knowledge of human nature. So, to take an example from this case, it seems to us plain that it will assist retention of associates, at least to some degree, that they know that partners are going to have to retire at a particular age. It is also self-evident, we think, that it will assist forward planning, particularly in relation to the operation of particular departments, to have the predictability of knowing when a partner will leave. It does not need a business planner to give evidence about that. Tribunals must, no doubt, be astute to differentiate between the exercise of their knowledge of how humans behave and stereotyped assumptions about behaviour. But the fact that they may sometimes fall into that trap does not mean that the Tribunals must leave their understanding of human nature behind them when they sit in judgment.
74. Here, however, we are satisfied that the appellant is right to say that there has been a stereotyped assumption that partners will by the age of 65 be more likely to be under performing than partners of a younger age. The Tribunal's assessment was based on the assertion that this was a reasonable assumption. With respect to the Tribunal, we think that reasoning of that kind is what the legislation is seeking to avoid. It is not self-evident that performance will dip in that way at that age, and there was no evidence to support that proposition before the Tribunal. It follows that, in our view, this particular legitimate aim relied upon, namely to promote collegiality between partners, could not justify the rule.
75. As we have said, we accept that the partnership is in principle entitled to take the view that it does not want to have a performance regime leading to expulsion, and that factor could in principle justify a compulsory retirement age, but in such a case the partnership needs to analyse very carefully the age at which performance falls off. That does not necessarily mean that there have to be specific examples of underperforming partners. That will be impossible in, say, a new firm starting out. It would, however, require evidence of a considered and reasoned explanation as to why the particular age had been chosen. Mere assertion would not be enough.
76. In this context we also observe that where a partnership has plainly given careful thought to this, and has taken a view in the light of its past experience, or that of similarly placed firms, that a particular retirement age should be stipulated for reasons which it can rationally explain, that will often quite properly carry considerable weight with a tribunal. The Tribunal must not, of course, apply the test of reasonable responses to the principle of proportionality as Pill LJ made plain in the case of Hardys and Hansons v Lax [2005] IRLR 726 para 32. However, those who are involved daily in the operation of the business are plainly in a much better position to assess business needs, and the effect of the business on staff, than tribunal members who may come from a totally different business background. Tribunals must be alive to this and not readily substitute their relative ignorance of a particular area for the considered wisdom of those who are in a better position to understand how the business operates. Tribunals must always bring a critical eye to evidence of this nature, and must be very careful to ensure that there is no stereotyping, but they must also recognise their own limitations.

Disposal.

77. The decision cannot stand. The Tribunal was entitled to find that the principle of compulsory retirement was justified and achieved certain legitimate objectives. The partnership could therefore properly adopt a rule requiring partners to retire at a particular age. However, in our view, the Tribunal were not entitled to find that the partnership had established - the onus being on them - that they were justified in fixing the relevant age at which the partners should be retired at 65 because performance would drop off at around that age. There was no evidential basis for the assumption.
78. We do not accept, as the Tribunal did, that it was a reasonable assumption or could be said to be self evident. We appreciate that it is fixed as the age at which employees may be compulsorily retired under the domestic law, but that provision is adopted for national labour market considerations rather than because performance is deemed to diminish at that stage.
79. Of course, if the partnership is to have a rule of this nature which is designed to avoid performance management controls leading to expulsion, it will necessarily involve fixing a compulsory retirement age at which some partners would still remain able to perform satisfactorily. However, that inevitably follows once the objective is considered to be legitimate.
80. We have considered what the implications are of our finding. We find that the collegiality objective does justify the adoption of a compulsory retirement rule, but that the Tribunal was not entitled to form the view that this objective itself justified fixing that age at 65.
81. However, we also find that the Tribunal was entitled to conclude that the other two objectives were legitimate. We cannot be sure what decision the Tribunal would have reached had it assessed the question of justification by reference to these two objectives alone. Accordingly the case must be remitted to the Tribunal to consider the question afresh. We have no doubt that it should if possible be the same Tribunal. They produced an impressive decision which demonstrates that they are fully aware of the facts. The Tribunal will need to hear submissions, but we leave it to them to determine whether they will allow fresh evidence.
82. In making the remission, we make two observations. The first is that the need to have some compulsory retirement age to achieve the collegiality objective can, in principle, carry some weight in the analysis of justification. The partnership has not shown that the age of 65 would be justified on this basis alone, but that is not to say that the objective cannot carry some weight in a context where there are other objectives also.
83. Second, although the partnership cannot rely directly on Article 30, which provides that the retirement of employees at 65 is not unlawful, it seems to us that it does have some, if limited, significance in circumstances where the partnership has been able to justify the adoption of a compulsory retirement age at some age.