Swann v GHL Insurance Services UK Limited, 31 March 2008, Case 2306281/2007

This case explores whether the introduction of a new employee benefits package by GHL Insurance Services UK Limited (GHL) discriminated against Mrs Swann on the grounds of age and, if so, whether the discriminatory treatment could be objectively justified.

In an attempt to improve the recruitment and retention of its staff, GHL put in place new terms and conditions of employment including a new employees' flexible benefits package, which would include a variety of benefits from a variety of providers.

GHL engaged a consultancy firm to conduct a survey of its employees. The results of the survey demonstrated that employees considered the most attractive employee benefit to be the opportunity to purchase private medical insurance. GHL therefore offered a private medical insurance package through Pru Health. All non-management employees with less than 5 years’ continuous service were allocated a 'flex fund' of 5 per cent of their basic salary. The premiums payable under the Pru Health private medical insurance scheme varied between employees, based on age and gender tables.

Mrs Swann brought an Employment Tribunal claim on the basis that the premiums under the private medical insurance package were age related, and more costly for her than for a younger person, and therefore GHL was unlawfully discriminating against her. GHL disputed this as all employees were given a 'flex fund', based on a percentage of their salary, and this was not discriminatory.

The tribunal held that even if the offer of the benefits package had amounted to discrimination on the grounds of age, they were satisfied that the employer had made out the justification defence. GHL had made all reasonable efforts to offer its employees a flexible benefits package that was the most advantageous possible, and, on the balance of probabilities, the package would have the desired beneficial effect on the recruitment and retention of staff.

Note that this was not a unanimous decision and emphasises the need for employers to consider the potential discriminatory effects of employee benefit packages.

View the judgment.