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The Employment Appeal Tribunal (EAT) has handed down its decision in a ruling on whether employers can objectively justify age discrimination in a redundancy situation.
Mr Woodcock was Chief Executive of North Cumbria Primary Care Trust and was made redundant following the merger of a number of Primary Care Trusts (PCTs) in the area. Mr Woodcock had applied for one of the new chief executive roles after the PCT merger but was unsuccessful and no alternative employment for him was found. He claimed that his dismissal amounted to direct age discrimination as notice to terminate his employment was given so as to expire one month before his 50th birthday, when he would have benefited from an enhanced pension.
The Employment Tribunal found that Mr Woodcock had suffered direct discrimination by being dismissed without proper consultation, but this was justified as it was a proportionate means of achieving a legitimate aim – which included the avoidance of a significant cost to the Trust in respect of the enhanced pension.
The EAT agreed that the tribunal had correctly applied the test but threw doubt on established thinking laid down in Cross v. British Airways plc [2005] IRLR 423, which is said to be authority for the proposition that “cost alone cannot be a legitimate aim for the justification of discrimination”. The EAT stated, "We respectfully agree with Burton P’s observation ...that, as a matter both of principle and of common sense, considerations of cost must be admissible in considering whether a provision criterion or practice which has a discriminatory impact may nevertheless be justified; and we see no reason to take a different view in the context of the justification of (what would otherwise be) direct age discrimination. But we find it hard to see the principled basis for a rule that such considerations can never by themselves constitute sufficient justification or why they need the admixture of some other element in order to be legitimised."
The EAT did not need to decide the point and went on to say that they should be slow to depart from the established position but the reasoning will give lawyers much to play with and employers reason to be optimistic as to whether you can objectively justify age discrimination when cost is the sole issue.
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