In an unusual circumstances for redundancy (Lockwood v Department of Work and Pensions & Anor) the Court of Appeal has upheld that for cases of age discrimination, if a difference in [redundancy] payments were a proportionate means of achieving a legitimate aim, and so evidenced, then that is acceptable breach of The Employment Equality (Age) Regulations 2006.
Unlike other forms of discrimination, the Age Regulations has two limbs :
a person (“A”) discriminates against another person (“B”) if –
(a) on grounds of B’s age, A treats B less favourably than he treats or would treat other persons, or
(b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but –
- (i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons, and
- (ii) which puts B at that disadvantage,
AND (limb 2) A cannot show the treatment or, as the case may be, the provision, criterion or practice to be a proportionate means of achieving a legitimate aim.
The brief facts of this case
The specifics of this rather odd case are that an employee of the DWP, Romilly Lockwood, took voluntary redundancy at the tender age of just 26. The rules (in this case the Civil Service Compensation Scheme) said that people who were over 30 or 35 would receive more than people under the age of 30. “As a 26 year old leaver, with almost eight years’ service, she was entitled to a payment of £10,849.04. Had she been over 35 at the time she left, and had served the DWP for an identical length of service, she would have been entitled to a further sum of £17,690.58 under the rules.”
For those of a technical bent, the Civil Service Compensation Scheme (established way back in 1992 and little changed in it’s current form since 1987) provided as follows:
‘(a) one month’s pay for each year of service, plus
(b) the lesser of:
- (i) one month’s pay for each year of service given after 5 years service and
- (ii) one month’s pay for each year of service given after the employee’s 30th birthday, plus
- (c) one month’s pay for each year of service after the employee’s 35th birthday’.
The scheme was clearly and unashamedly discriminatory, i.e. the trigger for compensation was specifically age related “… financial protection in the form of compensation to people who lose their jobs prematurely through redundancy or re-organisation, with benefits calculated principally on the basis of length of service, so that all service is rewarded irrespective of age (albeit not always equally); with the “trigger” for compensation being age on the date of departure (rather than age on joining) from the Civil Service.”
The original ET found concurred that the scheme was ‘… designed to be most generous for those whose need was greatest. Those in the earliest part of their career would be likely to find it much easier to get other jobs … the proposals for enhancement between 31 and 36 and at higher rate between 36 and 40 were necessary to achieve a satisfactory balance between those under 40 who received their compensation in the form of a lump sum only and those over 40 who received a continuing payment, having in mind the generally accepted proposition that 40 was something of a watershed and that alternative employment was harder to find for those over that age … the provisions were not intended to be discriminatory in any way, but were simply designed to achieve a satisfactory build up to the age of 40.”
It is not of particular concerns to us but in the context of discrimination should be mentioned, the original Employment Tribunal (ET) “failed to consider the magnitude of the impact of the differential treatment in financial terms on younger employees. Put the other way, even if it was legitimate to award a higher redundancy pay to older employees, the ET did not consider whether its magnitude was appropriate or reasonably necessary to achieve that aim. Mr O’Dempsey referred us to Lady Hale’s observation in Homer’s case, at paragraph 24:
‘Part of the assessment of whether the criterion can be justified entails a comparison of the impact of that criterion upon the affected group as against the importance of the aim to the employer’.
Ms Lockwood’s did not make the relevant circumstances of her case materially different from that of the comparator, that said the Court of Appeal was also required to review the issue of comparitor used and it was found to be correct in that Ms Lockwood’s circumstances were [to be either the same or] not materially different from that of her comparator.
Justifying the second limb
(….the provision, criterion or practice to be a proportionate means of achieving a legitimate aim).
This is interesting because it shows just how detailed and objective analysis can help justify age related discrimination.
Peter Spain, head of the internal dispute resolution and pensions technical team in the scheme management executive of the Cabinet Office, gave evidence to the ET that was accepted. He referred to the Civil Service ethos. He said that “in order to deliver high quality public services, a productive and engaged work force was required. In order to attract, engage and retain high calibre staff, the Civil Service had to offer terms that would both be inviting to prospective staff and act as an incentive to existing staff. This included not only a reasonable package of terms during the period of employment, but generous terms after leaving service. This is part of work force planning. Early termination terms must be attractive, so that individuals volunteer for departure when work force numbers need to be reduced.”
Mr Spain also relied on statistics from the Office for National Statistics about the probability of an unemployed individual moving from unemployment to employment and how that varies by age. “The ONS found that an unemployed person in the age group 18-24 is 11.2 percentage points more likely to move into employment than someone aged 35-49. Likewise, an unemployed person in age group 25-34 is 8.1 percentage points more likely to move into employment than someone aged 35-49. The General Lifestyle Survey conducted by the ONS in 2009 showed that 5% of those aged 16-24 were married. This increased to 41% of the group aged 25-34, and 59% of the group aged 35-44. The average age at date of marriage in 2007 for women was approximately 34 years of age, and 36 years of age for men. The data produced by the Office of the Deputy Prime Minister in 2002 and by the Council of Mortgage Lenders in 2009 indicates that the average age of first time house buyers was around 32 or 33 from 2002-2007, and had increased to around 37 by 2009. The statistics relating to marriage and property purchases provide an illustration of responsibility that older workers are more likely to have than younger workers, and are consistent with the conclusions about the heavier family responsibilities (and thus greater need) of older workers reached by the working group in 1969,” says Mr Spain.
Appeal against a finding by the ET, which was upheld by the EAT, that the claimant had not suffered age discrimination when her redundancy payment was less than someone who was older than her. The first ground of appeal was allowed; she had suffered age discrimination. However, the appeal was dismissed on the basis that the difference in payments was a proportionate means of achieving a legitimate aim.
The previous Employment Appeal Tribunal also considered whether the objectives of the Scheme were legitimate objectives of a public interest nature within the meaning of EC Directive 2000/78, which had been transposed into domestic law by the 2006 Regulations.
So, what does this mean?
In my mind this case does not greatly advance the issue of proportionality as means of achieving a legitimate discrimination but it does provide us with good links to the main case law and close the issue of so called reverse age discrimination.
One factor to consider is the high burden required of employers who wish to discriminate on the grounds of age and in particular the breadth of contextual and objective data required, especially if read alongside the case of Seldon v Clarkson Wright and Jakes (A Partnership).
Citation: Lockwood v Department of Work and Pensions & Anor  EWCA Civ 1195
See also Seldon v Clarkson Wright and Jakes (A Partnership)  UKSC 16 which looked at the decision that the claimant should be made to retire at 65. The appeal dismissed but remitted to the ET to consider whether the choice of a mandatory age of 65 was a proportionate means of achieving the legitimate aims of the partnership.
Lady Hale helpfully cited a dictum of Lord Walker of Gestingthorpe in R (Carson) v. Secretary of State for Work and Pensions  1 AC 173, paragraph 60, explaining “man’s inability, from infancy onwards, to stop the passage of the years.”