Employers can defend a claim of direct or indirect age discrimination by showing that its actions are a proportionate means of achieving a legitimate aim. The decision in The Lord Chancellor and Secretary of State for Justice v McCloud is a reminder that an aim has to be rational in order to be legitimate and that an employer may need to produce evidence of the underlying reasons for a policy to convince a court of its legitimacy.

In 2011, the Hutton Report recommended significant changes to public sector pensions. Pension changes for judges were implemented in 2015. However, transitional arrangements for moving to the new scheme meant in broad terms that judges born before 1 September 1960 continued to be entitled to more generous pension provision than judges born after that date. Younger judges challenged the transitional arrangements as direct age discrimination. The government argued that the transitional arrangements were justified as a proportionate means of achieving a legitimate aim.

The legitimate aim that the government relied on was that of "protecting those closest to retirement from the financial effects of pension reform". However, the tribunal found that this was simply a way of saying that the government wanted to treat older judges more beneficially than younger judges. There was no evidence that those closer to retirement were more likely to have made fixed or concrete plans for retirement that would be difficult to change and those who were given the greatest degree of protection were in fact those who were least affected by the changes. As there was no evidence of disadvantage suffered by the protected groups or of a social policy objective for treating them more favourably, the government could not point to a legitimate aim.

Although the EAT initially upheld the government's appeal, the Court of Appeal has now reinstated the tribunal's decision. The tribunal was entitled to find that an aim that protected a group that least needed protection was irrational. There was simply no evidence that older judges needed the protection and as such the aim of protecting them could not be legitimate.

For employers, subject to a potential appeal to the Supreme Court, the Court of Appeal decision is a reminder that policies or practices that involve treating one age group less favourably than another need to be reviewed critically before they are implemented. If there is no evidence that the reasons for a policy are cogent and rational, a justification argument may fall at the first hurdle.