The Royal Bank of Scotland plc (“the Bank”) restructured the division in which Ms Palmer worked and she was placed at risk of redundancy. Just prior to the restructure, the Bank had decided to adjust its Voluntary Early Retirement ("VER") scheme, so that only those who were at least 55 at the date of leaving employment would be entitled to an immediate pension payable without reduction for early receipt. Previously the minimum age had been 50. The Bank delayed this adjustment until after the restructure.
Employees at risk of redundancy had already indicated whether they chose to accept voluntary redundancy (and a generously enhanced payment) or redeployment (if this were possible), with those who would be over 55 being offered VER as a third choice. Ms Palmer chose voluntary redundancy. As the adjustment was to be delayed, those who would be at least 50, but less than 55, were allowed to revisit their options, with the third option of VER being made available to them as it had not been before.
Ms Palmer (aged 49 at the time) complained that the failure to permit her to revisit her choice unlawfully discriminated against her on the grounds of age. She claimed that if she had been permitted to choose again, she would have elected redeployment, believing that it would have taken some time to explore any redeployment opportunities and she would, by the end of that process, have been old enough to opt for VER.
She brought a claim in the Employment Tribunal (“ET”) for unlawful age discrimination. In order to succeed, she needed to show that, because of her age, she had been treated less favourably than others who were in materially the same circumstances.
The ET decided that Ms Palmer was not in a comparable position to those between 50 and 55, since: (a) she was 49; and (b) her route to gaining VER would be different, and dismissed her claim.
Ms Palmer appealed to the Employment Appeal Tribunal (“EAT”) who dismissed her appeal and decided that the ET had been entitled to conclude that less favourable treatment had not been established, since the comparators could lawfully have chosen VER but the Claimant at her projected date of leaving employment could not. The prevention of employees under 50 being given the option of early retirement was a result of statute (the Finance Act 2004) and the Claimant’s treatment was, therefore, held to be lawful age discrimination.
The Bank was ultimately successful in defending Ms Palmer’s age discrimination claims. However, this case (and a number of other cases involving employees approaching retirement) emphasises the importance of considering carefully potential age discrimination issues when implementing any voluntary redundancy scheme. Employees who miss out on generous redundancy/retirement payments have a lot to lose and may be inclined to litigate.