When bringing a claim of direct age discrimination under the Equality Act, workers have to show that there aren’t any material differences between their case and that of their comparator. In Palmer v RBS, the Employment Appeal Tribunal (EAT) held that it was not age discrimination if the comparator group was able to benefit from an exemption under the legislation which was not available to the claimant.
In June 2012 the bank raised the age of entry to its voluntary early retirement scheme from 50 to 55. At more or less the same time, it announced a reorganisation of the section in which Ms Palmer worked, putting her at risk of redundancy. She was offered voluntary redundancy or possible redeployment but not voluntary early retirement as she was only 49. She chose redundancy.
After statutory consultation with the trade union, the bank agreed to delay the changes to the voluntary early retirement scheme until the planned reorganisation was completed. Employees who would have reached the age of 50 by the date of their dismissal were therefore offered voluntary early retirement in addition to redundancy or redeployment.
This option was not offered to Ms Palmer as she would not have reached the age of 50 by the projected date of her dismissal. She argued, however, that having changed its mind about when to introduce the revised early retirement scheme, the bank should let her choose the redeployment option as she would probably have reached the age of 50 by the time it found her another job, meaning she could opt for voluntary retirement. She complained that the bank had directly discriminated against her on the ground of age by refusing to allow her to change her option from redundancy to redeployment.
The tribunal disagreed, holding that she could not compare herself to employees who were allowed to “revisit” their choice for two reasons. Firstly, they were entitled to take early retirement before their employment was terminated; and secondly they could change their own nomination from “voluntary redundancy” to “voluntary early retirement”, whereas she could only have changed her nomination from redundancy to redeployment, had she been given the chance.
In any event, even if she could have identified a comparator, the bank had shown its treatment of her was a proportionate means of achieving the legitimate aim of avoiding compulsory redundancies.
The EAT dismissed the appeal. Firstly, it pointed out that the law allows employers to make an exception to the general prohibition on age discrimination when offering an early pension without actuarial reduction as long as the minimum age at which it is offered is 50. It therefore distinguished this case from Lockwood v Department of Work and Pensions (weekly LELR 348) in which the discrimination was unlawful. The reality was that Ms Palmer was precluded by law from taking direct advantage of a voluntary early retirement scheme whereas her comparators were not.
Although this finding was enough to dispose of the appeal, the EAT went on to consider the issue of justification. It agreed with the tribunal that the bank had a legitimate aim, in particular their desire to minimise compulsory redundancies, avoid artificially prolonging the process, fairness to other employees, specifically those displaced and seeking a new role, saving costs and preventing a windfall. Although the tribunal had not carried out the necessary balancing act of looking at the effects of the measure on a group as a whole against the means to be achieved, it was still clear why the tribunal thought the measure was proportionate.
This case makes clear that a tribunal considering justification needs to consider three main questions, to be addressed in turn:
- whether the act, policy or rule said to require justification pursues a legitimate aim
- whether the means adopted to achieve that aim is proportionate to achieving it
- whether, if the aim is legitimate and the means appropriate, it is no more than is reasonably necessary to do so