Holidays: the amount of holidays that a partner is entitled to will often increase with the length of service as a partner. This is indirectly discriminatory against younger partners. On the other hand, a provision that specifically gives increased holiday entitlement by reference to age will be directly discriminatory. Either way, unless the clause could be objectively justified it would be unlawful (such justification would need the firm to identify a legitimate aim, with the discriminatory act being a proportionate means of achieving that aim). In practice, it is difficult to see how that could be done.

Sabbaticals: many partnership agreements allow partners to take a sabbatical after a prescribed period of membership (eg ten or 15 years). Since this benefit is clearly based on length of service it indirectly discriminates against younger partners. The regulations say that discrimination in the provision of benefits during the first five years of membership is lawful, and thereafter any discrimination would have to be objectively justified. Accordingly, a sabbatical awarded somewhere between four and five years after joining the partnership would not be discriminatory (thereafter, it would have to be objectively justified).

Life insurance: it is common for agreements to require partners to make their own life insurance arrangements, so the partnership does not have any legal or moral obligation to their dependants if they die. Frequently, the obligation to take out life insurance is only imposed on partners up to the age of 60. Once again, that would seem to be discriminatory.

Compulsory retirement: the age regulations do not provide any default retirement age. This means a partner cannot be compulsorily retired at any age. Virtually all partnership agreements contain clauses requiring partners to retire (eg in the year in which they reach the age of 65). Such a provision is clearly discriminatory and we can expect many disputes over these provisions. It is frequent for partnership agreements to provide a winding-down period before retirement and for there to be a specific age for retirement; that process gives certainty for both sides and allows partnership planning for the firm. To remove this provision therefore seems to be nonsensical, but the consensus view is that it is unlikely to be a legitimate aim that would provide objective justification. In short, such provisions are likely to be unlawful.

What should partnerships do about this? The fact of the matter is that there is no straightforward advice, other than to confront the issue now (rather than wait until a disgruntled elderly partner decides to use age discrimination as a negotiating tactic). There are difficult issues to be confronted, but partnership provisions dependent upon age and length of service must be rewritten. See excellent article in [2007] LSG 5 April 20. © Practical Lawyer