Caroline Jennings reviews the recent EAT case of Palmer v RBS UKEAT/0083/14 which concerns whether or not a statutory restriction on eligibility for early retirement benefits could amount to age discrimination.

In this case, the Claimant was placed at risk of redundancy with a number of other employees. They were all given the option of choosing voluntary redundancy or redeployment. Those over 55 were offered an additional option to take voluntary early retirement. The Respondent subsequently introduced the option of voluntary early retirement for those under 55 but over 50. The Claimant (aged 49) wanted to change her choice from redundancy to redeployment on the basis that the redeployment process would (she hoped) take some time, during which she would reach the age of 50 and thereafter be entitled to elect the more favourable early retirement. The Claimant brought a claim on the basis that the Respondent’s failure to allow her to change her choice amounted to age discrimination.

The EAT summarised the conclusion of the Tribunal at para.10 as follows: “there was no less favourable treatment since the Claimant could not identify others who were in materially the same circumstances as her (a requirement of Section 23 (1) of the Equality Act 2010) (“the comparator issue”), such that section 13(1) could not be satisfied and in any event, if they were, then nonetheless the discrimination sought to achieve a legitimate aim (the avoidance of compulsory redundancies) and the Bank had shown its treatment of the Claimant to be a proportionate means of achieving that aim (“the justification issue”) such that section 13(2) was satisfied by the Bank.”

The EAT accordingly considered two key issues relating to the “comparator issue” and the “justification issue.”  The EAT agreed with the Tribunal that the Claimant had not established less favourable treatment. There was a material difference between the Claimant and the comparator group she relied upon: the Claimant could not claim early retirement at her projected date of dismissal whereas the comparators could (due to their difference in age). This would ordinarily not matter as the principle in Lockwood v DWP [2013] EWCA Civ 1195 would apply. In Lockwood, it was held that it is not permissible to take into account any material circumstances relating to the age of a claimant or their comparators. This important safeguard did not apply in this case as the material difference of age was a result of statute. The prevention of employees below the age of 50 being given the option of early retirement was a result of the Finance Act 2004. The Claimant’s treatment was held to be age discrimination, but in the circumstances that the same was prescribed by statue it was not held to be unlawful.

Although it was not necessary to dispose of the appeal, the EAT went on to consider the justification issue.  The Tribunal had identified the following factors as being justification for the treatment “(i) minimising compulsory redundancies; (ii) not artificially prolonging a time-bound process; (iii) fairness to other employees, specifically those displaced and seeking a new role; (iv) saving cost and preventing a windfall.” The EAT considered the Supreme Court decision in Seldon v Clarkson Wright and Jakes [2012] UKSC16, IRLR 590 which found that aims may be considered legitimate within the meaning of Section 13(2) of the Equality Act 2010 only if they are objectives of a public interest nature and consistent with the social policy aims of the State.  The EAT set out that following MacCulloch v ICI plc [2008] IRLR 846 that “a Tribunal considering justification needs to consider sufficiently each step in the reasoning process. Since there are three principal matters to be considered this necessarily involves three main questions, to be addressed in turn: (1) whether the act, policy or rule said to require justification pursues a legitimate aim (which in a case of alleged age discrimination will be a public interest matter in accordance with Lady Hale’s judgment); (2) whether the means adopted to achieve that aim (in most cases this will be a policy or rule affecting a group) is appropriate to achieving it; (3) whether if the aim is legitimate and the means appropriate, it is no more than is reasonably necessary to do so.”  On the particular facts of this case, the EAT concluded that the appeal would have succeeded on the basis of the reasons being insufficient but it was not necessary to consider that point further.

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