If an employee is awarded a far greater sum of money as part of an enhanced redundancy package than their younger colleague, most HR professionals would cry “age discrimination”. However, under the veil of public interest, things are not quite that clear cut. Employment lawyer Helen Ward looks into when age discrimination can be justified.
What happens if one employee gleans greater benefit from an enhanced package than another? Is that discriminatory? How should these enhanced packages be calculated? These were some of the issues dealt with recently by the Employment Appeal Tribunal (EAT).
Q. What is age discrimination?
Age is one of nine “protected characteristics” under the Equality Act 2010. The remaining eight are race, sex, sexual orientation, gender re-assignment, marriage or civil partnership, disability, pregnancy or maternity and religion or belief.
The Equality Act makes it unlawful to treat employees less favourably because they are in a particular age group, and to implement workplace policies and procedures which put anyone at a disadvantage because of their age.
Q. Can age discrimination ever be justified and if so, when?
Ordinarily different treatment because of a protected characteristic cannot be justified, but there is an exception to the rule when the different treatment is on the basis of a person’s age and can be objectively justified.
Age is the only protected characteristic that changes throughout a person’s life, and everyone could potentially benefit from preferential treatment on the grounds of age. It is likely that, for this reason, there is such an exception for age discrimination. However, it now seems that the exception only applies when it is considered to be in the public interest.
Q. What is objective justification?
Essentially, it means that an employer’s actions must be a proportionate means of achieving a legitimate aim. The courts have also found that when employees are treated differently because of their age, the employer’s actions must support a social policy objective, rather than simply the employer’s own private interests. Reducing unemployment, encouraging career progression and rewarding employee loyalty all pass that test.
Q. Was age discrimination justified in Lockwood v Department for Work and Pensions?
The recent EAT case of Lockwood v the Department for Work and Pensions touched on the issue of objective justification of age discrimination. The decision confirmed the significance of the “public interest test”.
In this case, Ms Lockwood was an administrator for the Department of Work and Pensions (DWP). After nearly eight years’ continuous employment, her role was placed at risk of redundancy. She was aged 26 at the time and took advantage of the DWP’s voluntary enhanced redundancy scheme. Had she been aged over 35 she would have been awarded around £28,000 but instead she received just shy of £11,000.
The DWP argued that it was easier for people in Ms Lockwood’s age group to find a new job after having been made redundant, compared to her older colleagues. Statistically speaking this is the case and the EAT agreed, highlighting that providing an appropriate financial cushion for older employees can be objectively justifiable age discrimination.
The DWP’s voluntary redundancy scheme was proven to support a valid social policy objective aimed at helping older employees while they find alternative employment. This is the essence of the public interest test which has been established by the Supreme Court in previous cases.
Q. What do employers need to remember?
Despite cases such as Ms Lockwood’s, employers should still seek to treat everyone equally. Targeting certain age groups could result in time and cost intensive employment tribunal claims.
If cost reductions and redundancies become unavoidable, employers should ensure that any dismissals are not tainted by age discrimination and that a fair dismissal follows on from a fair consultation process.
Employers that do treat certain age groups differently for whatever reason should always consider whether or not they meet the “public interest test”. Remember that any such initiatives must be objectively justifiable and based on a social policy objective.
Seeking legal advice before even considering a policy or initiative that could fall foul of the Equality Act is highly advisable. The money saved from a potential tribunal claim can then be spent on business development instead.
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Helen Ward is an associate at Clarion
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