The decision of the Court of Appeal in Seldon v Clarkson Wright and Jakes will be greeted with a sigh of relief by many members of partnerships, who had feared that the partnership could find its future marred by an inability to promote new partners while existing partners refused to retire.
From the other perspective, the decision will not be well received by those partners at or nearing retirement age who feel they still have a lot to offer the partnership.
The nub of the issue was whether a firm of solicitors could require a partner to retire on reaching the age of 65.
In a complex ruling, the Court of Appeal ruled that the requirement that partners retire at 65, which was included in the firm's partnership deed and was agreed by all partners, was justified as a proportionate means of achieving legitimate aims and did not therefore contravene the Employment Equality (Age) Regulations 2006.
A private employer, ruled the Court, does not have to satisfy the test of a compulsory retirement age being consistent with 'social policy objectives'.
An employer's aim of having a happy workplace is consistent with the social policy justification in the Age Regulations and a mandatory retirement age could also be seen as being consistent with a desire to allow people to retire with dignity.
Hot on the heels of this decision, the Government has published its consultation paper on removing, by October 2011, the Default Retirement Age (DRA) of 65 contained in the Age Regulations. The DRA applies only to employees, but partnerships wishing to retain a compulsory retirement age of 65 may, in future, find it more difficult to objectively justify the requirement.