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How might a mandatory retirement age affect my partnership?

Lawyer David Walker explains how new legal rulings will change the nature of your partnership, especially for those GPs approaching retirement

The majority of GPs are happy to retire in their mid 60s. However a significant number work beyond state pension age for various reasons. The current pensions debate, with its focus on eroding retirement income, may make others think about delaying their retirement plans. However there is another, relatively new issue which has to be considered, namely age discrimination. 

 

The recent Supreme Court's recent decision makes it clear that operating a fixed retirement age is discrimination unless it can be justified. Partnerships which currently operate a retirement age for partners will need to consider whether they will continue to do so. If they do then this must be backed by public interest aims to justify such a policy. That might be achievable. However they will also have to show that the retirement age selected is a proportionate means of achieving those aims. This latter issue is likely to be the hardest issue to address given the uncertainty in this relatively new area of the law. What is clear is that most employers will not re-introduce a retirement age for their employees but will need to rely more heavily on better performance management

Since 2006 it has been unlawful to discriminate on the ground of age. This includes forcing self-employed partners to retire unless this can be justified. The same rules now also apply to employees.

This was the key issue in a decision recently in the case of Seldon v Clarkson Wright and Jakes. A self employed partner in a law firm was forcibly retired at the year end following his 65th birthday in accordance with his partnership deed. He challenged that decision as he wished to continue to work. The Court considered the rules that apply if you want to try and "justify" retiring someone. The partnership had to prove that it had a 'legitimate aim' to be able to operate a retirement age. If it could meet this test it then had to show that the particular age chosen was a 'proportionate means' of achieving that aim. As age was the direct reason for the discrimination the partnership had to show that it had public policy reasons to justify its action rather than, for example, its own business reasons.

The court stated that the public policy reasons broadly fall into two categories. The first is described as 'intergenerational fairness'. It was held legitimate to forcibly retire a partner to enable senior employees to be given the opportunity to be considered for partnership. This would help prevent a career log jam resulting in the loss of talent.

The partnership also successfully argued that retiring a partner to facilitate work force planning fell within the concept of 'intergenerational fairness'.

The second general public policy aim which might justify a forced retirement relates to the 'dignity' of the individual. In this case the partnership operated a collegiate approach allowing partners to work till retirement age without any formal performance management The court held this was a legitimate aim but made clear that other partnerships do not have to adopt this approach.

The court also highlighted a further exception to the general rules which could amount to a potential aim which might justify retirement, namely for the protection of the public. This did not apply in this case but is relevant to the medical profession

The partnership still had to convince the court that deciding to retire the partner at 65 (rather than some other age) was a 'proportionate means' of achieving its aims. The case has been sent back to the original Employment Tribunal to decide that issue as the Appeal court was not satisfied that this had been fully considered.

How this affects GPs

This case sets down important guidelines for all professions but each case has to be considered on its own particular facts.

It does not matter whether a partnership has a set retirement age in a partnership agreement. That does not determine the issue. Also it should not be assumed that even if a partnership has legitimate aims to invoke a retirement age that this means that the age of 65 will be upheld by the courts as justified. This retirement age was abolished for employees who, now like self employed partners, can only be retired if this can be justified. In addition the state retirement age is to be increased to 66 for everyone in 2020. It is anticipated that the trend is likely to be for fixed retirement ages to be greater than 65 if they are to stand a reasonable prospect of being justified. 

Therefore if a GP partner approaching, say 65, is being asked to retire but does not wish to do so this will give rise to issues similar to the recent case. If the matter is disputed there would be the right to bring a claim for age discrimination before an Employment Tribunal.  The relevant GPs practice would have to consider specific public interest aims to help justify its decision. This is more likely to be an issue where the practice has a history of employing a number of non-principals. However even where it does not the retiring partner is usually leaving to make way for someone of a younger generation.

If the retiring doctor is a salaried employee, there are arguably even stronger grounds to suggest that a forced retirement age at say 65 will be even more difficult to justify in light of the abolition of the default retirement age of 65 for such employees. Indeed the vast majority of employers are operating without any retirement age for their employees.

Partnerships with existing fixed retirement ages for partners will have to decide whether they intend to seek to implement these in light of the above developments and risks.  However if they do how might a partnership broach the issue of retirement with a partner approaching 65? The safest way is not to have an initial specific discussion about retirement but to have a general discussion about the individual's career plans. If they indicate a reluctance to retire legal advice should be sought.  The recommended approach in relation to employees is to raise the issue of the individual's career plans at an annual appraisal and do so with all employees irrespective of age.

Patient safety

There is the important issue of clinical performance. The European Court has recognised that it may be a potential legitimate aim to protect the health of patients in deciding to set a retirement age. The particular retirement age chosen would also have to be 'proportionate' to achieving that health and safety aim. It should be noted that in the above court proceedings it was held that there was no evidence to show that the average lawyer's performance deteriorated at age 65 and that to make such an assumption was a stereo typical ageist approach. It is likely that a similar view would be taken in relation tothe medical profession at age 65. There is, as yet, no clear judicial guidance on this issue.  

If there is clear evidence of a GP's performance affecting patients' health and safety then this should be properly managed. The GP's performance may be unrelated to his/her age. This should be separately addressed as not being an age related issue

There is a significant risk that if a GPs practice allows a poor performer to soldier on until a fixed retirement date and then refuses to leave , a court may hold that the reason for the GP leaving was the fixed retirement age and not performance. If the GP was say  65 then a court might well hold that the introduction of a rule to forcibly retire all GPs in the practice at that age to protect patients' health was not supported by the general body of evidence about the average GPs ability to protect such patients. If it did then the defence is likely to fail.

Given the above are there clinical skills assessments available that partners can take to assess their fitness to practice and what other benchmarks are available?

There is no single test that a doctor can take to assess their fitness to practice. Doctors have been encouraged to reflect on and assess their own work. For an additional payment (Postgraduate Education Allowance) GPs can attend a set number of approved courses. GPs undertake an annual appraisal including developing a plan for the next year.

A GP's work load is more available for review than ever before. Electronic notes are more legible and can be searched making it is easier to see what is being done. The Quality and Outcomes framework (QOF) provides some measure of the quality of care provided by the whole practice. Revalidation from the GMC is being rolled out from this year and includes a multi-source feedback from colleagues as well as a target for educational activities.

David Walker is a partner at Dundas and Wilson

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