Macculloch v Imperial Chemical Industries plc [2008] UK EAT 0119/08

This is a recent employment case in which the principal issue was whether ICI's contractual redundancy payments scheme discriminated against the claimant on grounds of her age. However, the principles should apply equally in respect of pensions issues.

The Employment Appeal Tribunal (EAT) summarised the legal principles relevant to the justification of age discrimination:

  • the burden of proof is on the respondent to establish justification;
  • the tribunal must be satisfied that the measures adopted by the employer correspond to a real need, are appropriate with a view to achieving the objectives pursued and are reasonably necessary to that end;
  • the principle of proportionality requires an objective balance to be struck between the discriminatory effect of the measure and the needs of the undertaking. The more serious the discriminating impact, the more cogent must be the justification for it; and
  • it is for the tribunal to weigh the reasonable needs of the undertaking against the discriminatory effect of the employer's measure and to make its own assessment of whether the former outweighs the latter. There is no "range of reasonable response" test in this context.

The EAT also noted that it had not been argued that the test for justification for direct discrimination is different than the test for indirect discrimination, which is an issue currently before the European Court of Justice in R v Secretary of State for BERR (ex parte Incorporated Trustees of National Council on Ageing) [2007] EWCH 3090. However, the EAT stated that it, "would accept, however, that at least in circumstances where the direct discrimination is reflected in general rules or policies, the discriminatory effect of the measure will necessarily be greater than where a rule is cast in apparently neutral terms but had indirectly discriminatory adverse effects."

Comment: this case should be noted by employers and trustees alike since it may mean that in some cases direct discrimination may be harder to justify.

View the Judgment.