In HM Land Registry v Benson and Others, the EAT held that refusing to give early retirement to employees aged between 50 and 54, on the grounds of cost, was not indirect age discrimination.
The Land Registry is a selffinancing trading fund which is required to break even each year. In order to address overstaffing, the Registry proposed a scheme allowing employees over 50 to take ‘compulsory’ early retirement, and those under 50 to volunteer for redundancy under the terms of the Civil Service Compensation Scheme (CSCS). It was made clear that the budget for this exercise was limited and that if there were too many applications, employees would be selected on the basis of the cost of their entitlements.
Five employees aged between 50 and 54 were not released because their entitlement to an immediate unreduced pension would have been particularly costly. They brought tribunal claims alleging indirect age discrimination. The Employment Tribunal found for the employees, stating it would have been affordable for the Land Registry to release everyone who had applied even if it would have meant going over budget. The Tribunal held that the selection process was not a proportionate means of achieving the legitimate aim of reducing headcount.
However, the EAT disagreed and overturned this decision. It held that the aim of using the lowest cost as a criterion was to reduce headcount in such a way as to ensure that costs did not exceed revenue. A business is entitled to seek to break even year-on-year and to make redundancies in order to help it do so where necessary. It was therefore legitimate and proportionate to make decisions about the allocation of resources by imposing a budget on the amount to be spent on redundancies, even if that might mean that selection had to be made between applicants based on cost. The EAT acknowledged that using a ‘cheapness criterion’ was disproportionately unfavourable to employees in the claimants’ age group, but stressed that not all measures with a discriminatory impact are unlawful. Employers should note that this decision does not mean that discriminating on the same basis will be justified in other cases. Here, it was crucial that the EAT found that the Land Registry had no real alternative to using cheapness as the main criterion.