A court has ruled direct age discrimination is acceptable if it can be justified.

In a high-profile case between Peter Bloxham and City law firm Freshfields Bruckhaus Deringer, an employment tribunal found in favour of the employer.

Mr Bloxham had claimed the transitional pension scheme operated by Freshfields on the closure of its existing pension scheme was directly discriminatory. Under the old scheme and the transitional arrangements, a partner who was 54 at the date of closure of the scheme and retired with consent would be subject to a discounted pension whereas those who were 55 and over at that time would receive their full entitlement. As Mr Bloxham was 54, and had only received a discounted pension, he had suffered less favourable treatment on grounds of age.

However, under the Employment Equality (Age) Regulations 2006, an employer can defend discriminatory treatment if it can show that treatment was a proportionate means of achieving a legitimate aim.

The Tribunal found that Freshfields had a legitimate aim in reforming its pension arrangements to reduce the 'intergenerational unfairness' caused by the structure of the existing scheme. It stated that it would be "an error of law to focus solely upon the treatment and not consider the context in which the treatment occurs. It seems to the Tribunal that this will be particularly necessary in cases of age discrimination because of the need to recognise the changes to the treatment of persons of one age or age group may, as in the instant case, directly affect to some extent the treatment of persons in a different age group."

In a statement, Freshfields' joint senior partner, Guy Morton, said: "It is a pity that this misguided claim was ever brought to the tribunal. We are pleased that the tribunal has recognised that both the reforms to our partner pension scheme and the procedures through which they were adopted were fair."

Bloxham’s advisers, Dawsons Solicitors, said he was reviewing the implications of the result and the options open to him, adding: "Our client is naturally disappointed but his case has clarified the interpretation and application of the new law. Although the Tribunal’s decision has not gone his way he was entirely justified in questioning a process that has been shown to be discriminatory."