UKSC 16
On appeal from:  EWCA Civ 899
Seldon (Appellant) v Clarkson Wright and Jakes (A Partnership) (Respondent)
Lord Hope, Deputy President
JUDGMENT GIVEN ON
25 April 2012
Heard on 17 and 18 January 2012
Robin Allen QC
(Instructed by Equality & Human Rights Commission)
(Instructed by Clarkson Wright and Jakes LLP)
|Intervener (Secretary of State for Business, Innovation and Skills)
Dinah Rose QC
(Instructed by Treasury Solicitors)
|Intervener (Age UK)
(Instructed by Irwin Mitchell LLP)
LADY HALE (WITH WHOM LORD BROWN, LORD MANCE AND LORD KERR AGREE)
"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."
"Any partner who attains the age of 65 years shall retire from the Partnership on 31st day of December next following his attainment of such age (or on such later date as the Partners shall from time to time and for the time being determine.)"
The deed did not make any provision for the removal of underperforming partners or for the reduction of their profit share to reflect underperformance. The partners preferred to address these matters through discussion and agreement.
"29.1 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;
29.2 ensuring that there is a turnover of partners such that any partner can expect to become Senior Partner in due course;
29.3 facilitating the planning of the partnership and workforce across individual departments by having a realistic long term expectation as to when vacancies will arise;
29.4 limiting the need to expel partners by way of performance management, thus contributing to a congenial and supportive culture in the Respondent firm;
29.5 enabling and encouraging employees and partners to make adequate financial provision for retirement;
29.6 protecting the partnership model of the Respondent. 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 Respondent as employees or salaried partners rather than equity partners."
It was made clear that the firm was not relying on the personal characteristics or any poor performance of Mr Seldon, nor were they relying on the structure of the wider market for legal services, but simply upon their own circumstances.
(1) whether any or all of the three aims of the retirement clause identified by the ET were capable of being legitimate aims for the purpose of justifying direct age discrimination;
(2) whether the firm has not only to justify the retirement clause generally but also their application of it in the individual case; and
(3) whether the ET was right to conclude that relying on the clause in this case was a proportionate means of achieving any or all of the identified aims.
"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."
"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 where 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 age . . . 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, . . ."
"This Directive shall be without prejudice to measures laid down by national law which, in a democratic society, are necessary for public security, for the maintenance of public order and the prevention of criminal offences, for the protection of health and for the protection of the rights and freedoms of others."
". . . Member States may provide that a difference of treatment which is based on a characteristic related to any of the grounds referred to in article 1 shall not constitute discrimination where, by reason of the nature of the particular occupational activities concerned or of the context in which they are carried out, such a characteristic constitutes a genuine and determining occupational requirement, provided that the objective is legitimate and the requirement is proportionate."
"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.
Such differences of treatment may include, among others:
(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;
(b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;
(c) the fixing of a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement."
"(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.
(2) A comparison of B's case with that of another person under paragraph (1) must be such that the relevant circumstances in the one case are the same, or not materially different, in the other.
(3) In this regulation –
(a) 'age group' means a group of persons defined by reference to age, whether by reference to a particular age or a range of ages; and . . . "
"(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."
It is not in dispute that enforcing a retirement age would be unlawful within regulation 17 if it amounts to unjustified discrimination within regulation 3.
"(1) This regulation applies in relation to an employee within the meaning of section 230(1) of the [Employment Rights Act 1996], a person in Crown employment, a relevant member of the House of Commons staff, and a relevant member of the House of Lords staff.
(2) Nothing in Part 2 or 3 shall render unlawful the dismissal of a person to whom this regulation applies at or over the age of 65 where the reason for the dismissal is retirement."
"It is apparent from article 6(1) of Directive 2000/78 that the aims which may be considered 'legitimate' within the meaning of that provision … are social policy objectives, such as those related to employment policy, the labour market or vocational training. By their public interest nature, those legitimate aims are distinguishable from purely individual reasons particular to the employer's situation, such as cost reduction or improving competitiveness, although it cannot be ruled out that a national rule may recognise, in the pursuit of those legitimate aims, a certain degree of flexibility for employers."
As to the fifth question, as the dispute was about the retirement age provisions, it was not necessary to interpret article 2(2)(b) which was concerned with indirect discrimination [63, 64]. But the Court did observe that the scope of article 2(2)(b) and article 6(1) is not identical . In another passage at , also much relied upon on behalf of Mr Seldon, it pointed out that:
". . . it is important to note that [article 6(1)] is addressed to the member states and imposes on them, notwithstanding their broad discretion in matters of social policy, the burden of establishing to a high standard of proof the legitimacy of the aim pursued."
"That allows not only employees and employers, by means of individual agreements, but also the social partners, by means of collective agreements – and therefore with considerable flexibility – to opt for application of that mechanism so that due account may be taken not only of the overall situation in the labour market concerned, but also of the specific features of the jobs in question (Palacios de la Villa, )." 
So article 6(1) did not preclude a measure such as paragraph 10.5 of the national law; but the collective agreement implementing it must itself pursue a legitimate aim in an appropriate and necessary manner . The clause offered stability of employment and the promise of foreseeable retirement while offering employers "a certain flexibility" in the management of their staff, thus reflecting "a balance between diverging but legitimate interests, against a complex background of employment relationships closely linked to political choices in the area of retirement and employment" . So it was not unreasonable for social partners to regard the clause as appropriate . But was it necessary, given the significant financial hardship caused to workers in the commercial cleaning sector, where poorly paid part time employment is typical ? Were there less onerous measures? People who had reached retirement age could continue to work, and must not be discriminated against on grounds of age in finding work , so they were not forced to withdraw from the labour market . So the measure was not precluded. There is no suggestion that its actual application to Frau Rosenbladt, who needed to carry on working because her pension was so small, had also to be justified.
"Therefore, in defining their social policy on the basis of political, economic, social, demographic and/or budgetary considerations, the national authorities concerned may be led to choose to prolong people's working life or, conversely, to provide for early retirement (see Palacios de la Villa,  and ). The Court has held that it is for those authorities to find the right balance between the different interests involved, while ensuring that they did not go beyond what is appropriate and necessary to achieve the legitimate aim pursued (…Palacios de la Villa … ,  …Rosenbladt… )." 
Budgetary considerations might underpin the chosen social policy, but they could not in themselves constitute a legitimate aim within article 6(1) .
(1) All the references to the European Court discussed above have concerned national laws or provisions in collective agreements authorised by national laws. They have not concerned provisions in individual contracts of employment or partnership, as this case does. However, the Bartsch case, mentioned at  above, did concern the rules of a particular employers' pension fund; and the Prigge case,  above, concerned a collective agreement governing the employees of a single employer, Deutsche Lufthansa.
(2) If it is sought to justify direct age discrimination under article 6(1), the aims of the measure must be social policy objectives, such as those related to employment policy, the labour market or vocational training. These are of a public interest nature, which is "distinguishable from purely individual reasons particular to the employer's situation, such as cost reduction or improving competitiveness" (Age Concern, Fuchs).
(3) It would appear from that, as Advocate General Bot pointed out in Kücükdeveci, that flexibility for employers is not in itself a legitimate aim; but a certain degree of flexibility may be permitted to employers in the pursuit of legitimate social policy objectives.
(4) A number of legitimate aims, some of which overlap, have been recognised in the context of direct age discrimination claims:
(i) promoting access to employment for younger people (Palacios de la Villa, Hütter, Kücükdeveci);
(ii) the efficient planning of the departure and recruitment of staff (Fuchs);
(iii) sharing out employment opportunities fairly between the generations (Petersen, Rosenbladt, Fuchs);
(iv) ensuring a mix of generations of staff so as to promote the exchange of experience and new ideas (Georgiev, Fuchs);
(v) rewarding experience (Hütter, Hennigs);
(vi) cushioning the blow for long serving employees who may find it hard to find new employment if dismissed (Ingeniørforeningen i Danmark);
(vii) facilitating the participation of older workers in the workforce (Fuchs, see also Mangold v Helm, Case C-144/04  1 CMLR 43);
(viii) avoiding the need to dismiss employees on the ground that they are no longer capable of doing the job which may be humiliating for the employee concerned (Rosenbladt); or
(ix) avoiding disputes about the employee's fitness for work over a certain age (Fuchs).
(5) However, the measure in question must be both appropriate to achieve its legitimate aim or aims and necessary in order to do so. Measures based on age may not be appropriate to the aims of rewarding experience or protecting long service (Hütter, Kücükdeveci, Ingeniørforeningen i Danmark).
(6) The gravity of the effect upon the employees discriminated against has to be weighed against the importance of the legitimate aims in assessing the necessity of the particular measure chosen (Fuchs).
(7) The scope of the tests for justifying indirect discrimination under article 2(2)(b) and for justifying any age discrimination under article 6(1) is not identical. It is for the member states, rather than the individual employer, to establish the legitimacy of the aim pursued (Age Concern).
Issues 1 and 3
"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."
"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, itself an important virtue."
Thus the EAT would not rule out the possibility that there may be cases where the particular application of the rule has to be justified, but they suspected that these would be extremely rare.
Application to this case
"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."
But I think that it is truly a case of direct discrimination of the kind referred to in regulation 3(1)(a). The proportionality test quoted above also applies to it, although the layout of the regulation in the statutory instrument might be taken as suggesting otherwise. Regulation 3(1)(a) provides that a person discriminates against another person for the purposes of the Regulations if, on grounds of B's age, A treats B less favourably than he treats or would treat other persons.