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Must a partner retire?

GP partners may be protected from being forced to retire at a certain age under age discrimination laws, says Jean Sapeta.

Despite their title, the Employment (Equality) Age Regulations 2006 affect professional partnerships as well as employees. They outlaw age discrimination, making it unlawful to make decisions or have policies relating to partners based on age-related factors.

One issue of interest to GPs which has already been scrutinised by employment tribunals is the application of fixed retirement ages to partners.

Unlike employees, who can be compulsorily retired at the national default age of 65, partners cannot lawfully be forced to retire at a fixed age, unless that 'discriminatory practice' can be shown to be justified.

Guidance as to what that objective justification could be is now available following an employment tribunal case brought by a former partner in a law firm.

He challenged the decision of his partners to use the partnership deed's retirement provision to compel him to retire at the age of 65.

Legitimate reasons

The firm put forward a number of factors which it said justified its decision. The tribunal accepted the following as being legitimate aims:

  • The need to ensure senior solicitors were given the opportunity of partnership after a reasonable period.
  • The need to avoid expelling partners for poor performance, which would undermine the firm's collegiate culture.
  • The need to facilitate the planning of the partnership and workforce across individual departments by creating realistic long-term expectations as to future vacancies.

Unacceptable
However the tribunal rejected other arguments put forward by the firm.

These included that there was a need to have sufficient turnover to allow any individual to have an expectation of becoming senior partner; to enable and encourage staff to make provision for retirement.

Another rejected argument was protection of the firm's partnership model because there would be a perverse incentive to retain people as employees if partners could not be lawfully retired at 65.

The tribunal stressed that it was not intending to lay down any general rule about what will be legitimate aims.

Given this, it would be helpful when reviewing the issue of retirement age to set out the reasons why a particular age has been selected as appropriate for retirement in either the partnership deed, or in a document such as partnership minutes to be retained with it. What a practice would find useful is a readily available list of legally approved legitimate business reasons - but there is no such thing.

Official guidance

However, the government's paper 'Age matters' sets out a number of potentially legitimate aims:

  • Health, welfare and safety.
  • Facilitation of employment planning.
  • Particular training requirements.
  • Encouraging and rewarding loyalty.
  • The need for a reasonable period of employment before retirement.
  • The recruiting or retaining of older people.

This list has no legal status and has not been sanctioned by any court or tribunal. So, partnership meeting minutes and discussion documents should record as many potentially legitimate aims as possible for any discriminatory provisions.

Mere assertions will not be enough; if challenged the practice will need to produce evidence the discriminatory practice is a proportionate means of achieving that business aim.

As in all other areas of life, forewarned is forearmed and the more prepared you can be in advance, the more likely you will be able to successfully defend any claim in this respect.

Jean Sapeta is a partner at solicitors Hempsons, www.hempsons.co.uk

Retirement facts

  • Age discrimination legislation applies to partnerships.
  • Partnerships cannot rely on the statutory default retirement age of 65.
  • Fixed retirement ages must be justified by coherent business reasons if they are to be lawful.
  • The partnership documents should reflect the legitimate business aim for fixing a particular retirement age.

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