In Lockwood v Department of Work and Pensions and anor, the Court of Appeal held that a voluntary redundancy scheme benefiting older employees, was objectively justified despite being less favourable treatment on the grounds of age.
The employer’s redundancy policy calculated redundancy pay in accordance with the Civil Service Compensation Scheme (the ‘CSCS’). Redundancy payments under the CSCS took into consideration an employee’s age and were more beneficial the older the employee was.
Ms Lockwood commenced employment when she was 18. She was made redundant when she was 26. Ms Lockwood was offered the opportunity to take voluntary redundancy, which she did and under the CSCS, she received a redundancy payment of £10,849.04. However, if she had been over 35 when she was made redundant, she would have received a further £17,690.58.
Ms Lockwood raised a claim in the employment tribunal alleging that the difference in redundancy payment constituted direct discrimination on the grounds of age. She argued that she, a 26 year old with 8 years’ service, had been treated less favourably than a 35 year old employee with 8 years’ service.
The employment tribunal rejected her claim and the EAT rejected her appeal. However, Ms Lockwood appealed to the Court of Appeal who found that she had been directly discriminated against on the grounds of her age but that the employer’s redundancy scheme was in fact objectively justified.
Throughout proceedings, the employer provided statistical evidence that individuals in younger categories and in their twenties could generally be expected to react more easily and more rapidly to the loss of jobs. They were also likely to have a greater degree of flexibility given they had less family and financial obligations. The statistics also supported the contention that younger people were more likely to move into employment more easily than others. The employer argued that the difference in pay under the CSCS was to bridge that gap financially. On that basis, the statistical evidence presented by the employer demonstrated that the redundancy pay scheme was a balanced way of achieving a legitimate aim.
Age discrimination is an atypical area of law that essentially permits employers to directly discriminate on the grounds of age, so long as it is objectively justified. Employers therefore have to prove their actions are a proportionate means of achieving a legitimate aim. That is not always easy to demonstrate. What this case tells us however is that statistical evidence can be crucial in assisting employers justifying the implementation of a scheme that essentially discriminates against employees on the grounds of their age.