In Witham v Capita Insurance Services Ltd ET/2505448/12, an Employment Tribunal considered whether stopping permanent health insurance (PHI) benefits once an employee turned 55 amounted to age discrimination.

Mr Witham, an employee of Capita Insurance Services Ltd (Capita), had been on long-term sick leave and receiving PHI benefits through a third party insurance provider for several years. He stopped receiving the benefits when he turned 55, in accordance with the terms of the insurance policy. During his sick leave, Capita had arranged a new PHI scheme under which he would have received benefits until the age of 65 but Mr Witham had been refused membership because it required employees to be "actively at work" when joining.

The Tribunal held that this was both direct and indirect age discrimination. It was direct discrimination because, if it had not been for his age (i.e. if he had been younger), Mr Witham would have continued to receive the benefits. It was also indirect discrimination because the new scheme's requirement for employees to be "actively at work" when joining placed employees over 45 at a particular disadvantage compared with those under 45 (as over 45s are more likely to receive PHI benefits than under 45s). In addition, neither the direct nor indirect discrimination could be objectively justified.

This is only a first instance decision but the finding of direct discrimination will be particularly worrying to employers as it means that any cut-off age (whether 55 or older) for ceasing benefits could potentially be found to be discriminatory. Employers should therefore consider offering all employees the same benefits (PHI or otherwise) regardless of their age.