Employment Appeal Tribunal (EAT) has ruled that a voluntary redundancy scheme
whereby employees over the age of 35 were paid more than younger employees with
identical length of service did not constitute direct discrimination on the
grounds of age (Lockwood v Department for Work and Pensions).
began working for the Department for Work and Pensions (DWP) as an
Administrative Officer in the Benefits Agency at the age of 18. Eight years
later, her job was no longer needed and she applied for voluntary redundancy
under the Civil Service Compensation Scheme (CSCS). Her application was
accepted and her employment ended in September 2007.
CSCS, Miss Lockwood was entitled to a redundancy payment of £10,849.04. Had she
been over 35, however, she would have been entitled to a further sum of
£17,690.58. The disparity in treatment prompted her to lodge a complaint of
direct age discrimination.
Employment Tribunal (ET) rejected her claim on two grounds. Firstly, it held
that there were material differences between the two age groups so they were
not truly comparable. Secondly, if the over 35 age group were truly comparable
with the younger age group, the DWP had objectively justified the less
favourable treatment of younger employees.
The EAT was
satisfied that no error of law had been made in relation to the ET’s finding
that there was a material difference between the two age groups. Statistical
evidence had been produced showing that the difference in payments reflected
the comparative difficulty loss of employment presented to the older workers – for
example difficulty in finding another job and in meeting family financial
commitments – compared with those in the younger age group. Whilst this finding
effectively disposed of the appeal, the EAT went on to consider the
In the EAT’s
view, the ET had taken into account relevant factors that entitled it to
conclude that the DWP had adopted proportionate means to achieve the legitimate
aim of providing workers with a ‘proportionate financial cushion’ until such
time as they could find another job, which would be more difficult for those in
the older age group.
The EAT then
went on to consider the public interest point identified by the Supreme Court
in Seldon v Clarkson Wright and Jakes, which was decided after the ET ruled in
this case. The Court ruled that in cases of direct discrimination, the ET
should consider, amongst other things, whether the difference in treatment
stems from an aim that can be objectively and reasonably justified as pursuing
a legitimate social policy derived from EU
Council Directive 2000/78/EC, which establishes a general framework for equal
treatment in employment and occupation.
The EAT held
that helping older workers who would find it harder than their younger
colleagues to find another job was a legitimate aim and the difference in
redundancy payments was a proportionate means of achieving that aim.
If you need
to carry out a redundancy programme, contact Nick
Fentiman for advice to ensure that the actions you take do not
contravene discrimination or other employment law.