Dismissal of Chief Executive to avoid an enhanced pension entitlement was justified direct age discrimination

Woodcock v Cumbria Primary Care Trust [2012] EWCA Civ

In a case decided before the Supreme Court’s recent judgments in Homer and Seldon, the Court of Appeal held that the dismissal of an employee without the usual redundancy consultation to avoid the liability to pay an enhanced pension was justified direct age discrimination.

Mr Woodcock was given notice of dismissal by reason of redundancy just before his 49th birthday. It was accepted by both parties that the notice had been served by the Trust without the benefit of the normal prior consultation, but following a long delay which the Trust had allowed to the employee’s benefit.

The Court of Appeal’s main task was to consider whether costs alone could be a legitimate aim capable of justifying direct age discrimination. Mr Woodcock argued that the only aim of the Trust was indeed cost saving, namely the avoidance of liability to pay an enhanced pension. He contended that this could not be a legitimate aim capable of justifying discrimination (relying on the earlier decision of Cross v British Airways).

Having considered the domestic and European authorities, the Court of Appeal concluded that treatment whose sole aim was to save or avoid costs was incapable of justification for these purposes. However, it went on to conclude that cost saving was not the Trust’s sole aim in serving the notice on Mr Woodcock. It concluded that the Trust’s aim was essentially to give effect to the prior decision to terminate his employment on the grounds of redundancy. In the Court of Appeal’s view, it would have been irresponsible for the Trust not to have served notice at the time that it did given the additional costs it would have incurred as a result of delay. 

Implications
Like the Seldon case heard by the Supreme Court after it, this case involved direct age discrimination on the part of the employer and the question of how and when such treatment can be justified. Unlike Seldon, the Court of Appeal in this case focussed solely on the issue of whether cost saving in isolation could be a legitimate aim capable of justifying the treatment.

The Court of Appeal did not consider that cost saving or any other identified aim had to entail a social policy element relating employment policy, the labour market or vocational training. The Supreme Court in Seldon has subsequently confirmed that such a social policy element is required in order to justify direct age discrimination by way of compulsory retirement. It will be interesting to see how the courts interpret the apparent conflict between the two decisions and whether the additional requirement from Seldon of a social policy aim will be taken to apply to future cases like Mr Homer’s.

For more information about this article, please contact Blair Adams by emailing blair.adams@dmhstallard.com

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