Deloitte succeeds in striking out part of mandatory retirement case

A Deloitte partner suing the advisory firm for an allegedly discriminatory mandatory retirement policy has had part of his case struck out.

Deloitte has succeeded in preventing Rio Tinto executives being dragged into a potentially precedent-setting age discrimination case being brought against it by a partner.

On Friday, Federal Court judge Justice Angus Stewart dismissed sections of Deloitte partner Colin Brown’s statement of claim against the professional services firm, in which he sought compensation for the “distress and anxiety” he felt from Deloitte’s alleged deception about its retirement policy affecting his relationship with the mining company and its executives.

The 64-year-old partner contended that Deloitte hired him in June 2014 to use his strong connections with Rio Tinto management to win a five-year contract with the miner in a bid that he would have a lead role in.

But Mr Brown says he was not informed of Deloitte’s alleged policy to retire partners at 62, which he says violated age discrimination laws, and was assigned to the Rio project without knowing he would be asked to retire as a partner and be moved into a consultant role.

Mr Brown said this should have been disclosed to the miner and in not doing so Deloitte caused him to “continue to suffer distress and anxiety as a result of the fact that he is not able to be open and honest with Rio Tinto and the senior executives of Rio Tinto.”

He said Deloitte knew about the legality of the policy, as a senior partner Deloitte’s Brisbane office made a statement to him around July last year that “the retirement age is not in the Partnership Agreement because it’s against the law”.

The Age Discrimination Act outlawed mandatory age-based retirement in 2004 but the big four mostly retain voluntary agreements with partners that they will retire between 55 and 60.

If the court finds in Mr Brown’s favour, these agreements may need to be modified or scrapped altogether.

On Monday, Deloitte argued for the section to be struck out, with barrister Richard McHugh SC arguing that Mr Brown was putting forward a belief of Rio Tinto without any evidence or connection to loss.

Deloitte also unsuccessfully sought to have Mr Brown’s claim that he had suffered $809,000 in lost wages, by moving from his former employer Deloitte Onch Audit LLC to the Australian arm because of the retirement policy, thrown out because it was beyond the statute of limitations.

Mr Brown is also claiming $3m on the loss of future income due to the alleged policy.

He remains a partner at Deloitte but claims he has been treated as an “inactive partner” since last May.

Deloitte denies there is an official mandatory retirement age in its partnership agreement, with CEO Richard Deutsch recently expressing support for partners staying on past the age of 62.