Dismissing an employee to avoid a liability for enhanced pension rights was found to be direct discrimination on the grounds of age in the recent employment tribunal case of Wooster v London Borough of Tower Hamlets.
Mr Wooster was employed by London Borough of Tower Hamlets ("the Council"). Following a reorganisation that displaced him from his post, Mr Wooster was seconded to the Council's third party social landlords to work on various projects. Mr Wooster remained on secondment for several years, still employed by the Council, but was eventually made redundant by the Council in December 2006.
Prior to Mr Wooster's redundancy taking effect it transpired that, by terminating Mr Wooster's employment prior to his 50th birthday in July 2007, the Council could avoid paying him pension benefits from age 50. By dismissing him prior to age 50, his entitlement to pension would be delayed until age 60.
The third party to whom Mr Wooster was seconded took the view that there was still work for him to do on secondment and were willing to fund his salary until July 2007, so as to allow him to benefit from the enhanced pension terms. The Council were unwilling to countenance this, at one point retorting to the third party that "if you are going to pay his salary then you can pay his bloody pension when he is 50. If he goes now we save the pension."
Mr Wooster pursued unfair dismissal and age discrimination claims. The unfair dismissal claim was conceded on procedural grounds. As regards the age discrimination claim, the tribunal concluded that Mr Wooster had been subject to direct age discrimination. The tribunal found that, whilst considerations of redundancy arose in good faith, "It was the fact of Mr Wooster's pensionable age that was the tipping point, if we might use such a phrase, that led to the dismissal" and that "....age was the reason for the decision to dismiss instead of redeploying Mr Wooster."
The case highlights the need to be wary of age-related factors when carrying out a redundancy. It should be noted however that this is a first instance decision and that the Council did not advance a justification defence to the age discrimination claim, so the case does not address whether the treatment of Mr Wooster in order to avoid liability for enhanced pension liabilities was a proportionate means of achieving a legitimate aim.