The Employment Appeal Tribunal has ruled that weeding out the most expensive applicants for an over-subscribed voluntary severance scheme was lawful despite its disproportionate impact on employees in the 50-54 age bracket. H M Land Registry v Benson and others is about arrangements to reduce the headcount at a number of Land Registry offices through voluntary redundancies. A budget of £12 million was allocated, and the aim was to implement the maximum number of redundancies for that sum, though some other non-cost factors needed to be taken into account.
Selecting the people eligible for the smallest pay-outs had a particularly adverse effect on staff over 50 but under 55 because of the long pension enhancements they were entitled to under the scheme. As a result only 26% of applicants in this age group were selected, as opposed to 49% or more of the nearest comparable age groups. The employment tribunal had thought that the resulting indirect discrimination could not be justified since the employers, in theory at least, could have afforded to allocate a higher budget to this exercise.
The EAT pointed it out that this was not a case of direct discrimination, or one where the claimants stood to suffer real hardship as a result. It did warn however that it was not saying that indirect discrimination of this nature could always be justified. But since the tribunal had concluded that there was no other practicable selection criterion, the cheapness criterion was lawful on this occasion.