An Employer must be able to objectively justify any provision, criterion or practice adopted which has a disproportionate impact on employees in a particular age group
An employer who adopts a provision, criterion or practice (PCP) that has a disproportionate impact on employees in a particular age group will commit unlawful, indirect age discrimination unless the discrimination can be objectively justified.
In the case of HM Land Registry v Benson (2012) HM Land Registry needed to reduce staffing costs and to do so it offered its employees voluntary redundancy/early retirement schemes with enhanced benefits. Those under the age of 50 were entitled to “compulsory early severance” of up to a maximum of six years pay. Those aged 50 plus were entitled to early retirement with unreduced pension. The scheme was oversubscribed which meant that the HM Land Registry had to undertake a selection exercise. It selected for release those applicants whose entitlements would be the lowest, (it made some adjustments to retain specialist expertise and maintain a balance between the grades). Five of the unsuccessful applicants brought claims to the Employment Tribunal alleging age discrimination, they were aged between 50 and 54.
Had they been selected, they would have received an immediate unreduced pension and were therefore particularly costly for the employer. They claimed that the use of the selection criterion relating to the amount of their entitlements constituted indirect age discrimination. The Tribunal held that it was affordable for HM Land Registry to release all of those who had applied albeit at an additional cost of £19.7million. It was noted that HM Land Registry had significant cash reserves. The employer appealed. The Employment Appeal Tribunal held that “cheapness criterion” was a justification and that the test of “affordability” was a legitimate aim. There was no need for the employer to establish that the measure adopted was the only course open to it.
Maxine Orr is a Partner in Worthingtons Solicitors Belfast, specialising in Employment Law.