Two recent decisions of the Employment Tribunal and the Employment Appeal Tribunal deal with the issue of justification of age discrimination. Both are employment cases but they are useful examples of those tribunals’ approach to age discrimination.
In MacCulloch -v- ICI the EAT looked in some detail at the issue of justification of age discrimination in the context of a contractual redundancy scheme.
Justification requires the respondent to show that its chosen measures 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 impact, the more cogent the justification must be.
The Employment Tribunal (ET) had found that the direct discrimination was justified. The EAT overturned this decision: although the scheme was indeed based on legitimate aims (including encouraging and rewarding loyalty, assisting older employees with more limited prospects in the job market, and encouraging older staff to leave to make room for younger employees), the case should be remitted back to the ET for consideration of the issue of proportionality, which it had failed to address.
Of particular interest in the pensions context is the EAT’s finding that, in a scheme where there is a standard set of rules, the aims must justify the scheme as a whole, not the individual's treatment; but the extent to which an individual is disadvantaged compared to his or her comparators is highly relevant to proportionality. However, in looking at proportionality the balancing exercise must look at the effect having a different scheme would have on the whole range of employees (i.e. proportionality is not purely an individual issue).
In Rainbow -v- Milton Keynes the ET found that a school had indirectly discriminated against Mrs Rainbow (aged 61) on grounds of age: a post had been advertised only for those with less than five years' experience. The school sought to justify this on grounds of cost.
In line with indirect sex discrimination cases the ET rejected this argument: cost can form the basis of objective justification provided it is combined with other factors. The ET also noted that, to rely on cost as a defence, the employer must provide evidence of budgetary requirements and of its consideration of other possible means of achieving the desired cost saving.