"I suffer from it myself, being 65," he told the court. "It isn't fashionable these days to appoint chief executives who are in their upper 50s."
The former Conservative Party chairman was giving evidence for corporate trouble-shooter John Clark in his pounds 3m compensation claim for loss of his post as chief executive of business services group BET after it was taken over by Rentokil.
Mr Clark says he will have serious difficulty in finding a new job, but Rentokil argues that an executive of his standing should be able to secure another post and that he is bound to "mitigate his own loss" by seeking to do so.
Rentokil's counsel, Andrew Hogarth, who recalled that Lord Tebbit had held himself out in the past as "a bit of an expert on the ease with which you can obtain employment", suggested that Mr Clark would seem to be an obvious candidate for employment.
Lord Tebbit, a non-executive director of BET until May this year, replied: "He is 55 years old and unfortunately there is a cult of ageism in this country."
Another barrier in Mr Clark's way was that many able chief executives were not suitable for positions in other companies. "There are some very good square pegs and some very good round holes," he said.
Responding to Mr Hogarth's suggestion that Mr Clark had influential friends who could recommend his ability to others, Mr Clark's counsel, Brian Langstaff QC, asked Lord Tebbit whether there was an "old school tie culture" in the world of commerce.
Lord Tebbit said: "Very little indeed. One assesses people on their work. Their reputation is normally public. There is not an old school network of people fixing jobs at cocktail parties and dinner parties."
American-born Mr Clark turned round the ailing fortunes of BET before it was acquired by Rentokil for pounds 2.2bn last April in a hostile takeover. He is claiming more than pounds 3m for loss of salary, pension rights, stock and share options, bonus payments, an executive car and chauffeur, and health insurance.
Rentokil admits wrongful dismissal and agrees it must compensate him. But it disputes how much, arguing that he was offered same "fair" terms as other former BET directors, all of whom accepted the offer.
Lord Tebbit told Mr Justice Timothy Walker that, after the takeover, Rentokil "demanded" termination of Mr Clark's service agreements and his removal from office. There had been no consultation with the BET board. BET directors agreed that this was not the correct way to deal with Mr Clark, who had "given his all to BET".
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