|
We have, on several occasions, mentioned concerns that law firms will now
find it difficult to retire older partners because of the new age discrimination
laws.
One question that has arisen is whether it is now unlawful to have a
specified retirement age for all partners. Prima facie, such a clause would
seem to fall foul of the new Regs (in force since 1 October). But, do
remember that it is still possible to discriminate against a partner on
grounds of age if it can be objectively justified. Accordingly, the imposition of
a retirement age will have to be shown to be a proportionate means of achieving
a legitimate aim (eg maintaining the growth and profitability of the firm). Whether
it is ‘proportionate’ will, in part, depend on the other means adopted towards
the same end (with performance being monitored, and clear performancerelated
criteria being set out). But, a correspondent in the Gazette suggests that
retention of retirement provisions in partnership agreements will probably be warranted for the vast majority of partnerships. The key is good succession
planning and the argument will be that no firm can expect to attract and retain
talent if career progression is blocked or limited by a body of ageing partners.
The imposition of an arbitrary retirement age, which is unsupported by strategic
planning and management practises, will undoubtedly leave law firms open to
challenge. But, if there is a sound business justification (backed up by
consistent performance criteria) then a fixed retirement age may be justifiable.
See [2006] LSG 7 September 10; 21 September 17.
|
|
October 2006 |