February 11, 2013

In a decision that will no doubt be welcomed by older workers, the Employment Appeal Tribunal has recently upheld a decision which found that it was not unlawful for an employer to operate an enhanced redundancy payment scheme which meant that younger employees received significantly less than their older colleagues. The case involved a Miss Lockwood who took voluntary redundancy from the Department of Work Pension after 8 years’ service.  She was 26 years old at the time.  Had she been 35 with the same amount of service her redundancy payment would have been almost £17,700 more. She argued that this was direct age discrimination.   The EAT disagreed.  It found that there is a material difference between her age group and the older age group who were entitled to the more generous redundancy terms and so it was not appropriate to draw a comparison between the treatment of the two groups.  In any event, it found that the less favourable treatment of the younger employees was justified because older workers tended to find it more difficult getting a new job after being made redundant. The decision is a little surprising for a number of reasons, not least because of the finding that it was not appropriate for Miss Lockwood to compare herself with an older employee who was made redundant in exactly the same circumstances.  Far be it for us to say that the EAT have got it wrong, but their logic on this point is a little difficult to follow. It will be interesting to see whether Miss Lockwood appeals.  In the meantime, our advice would be to treat the decision with caution.  If you do operate an enhanced redundancy scheme the safest way of avoiding liability for age discrimination is to ensure that it mirrors the statutory scheme (i.e. by using the same age bands and multipliers that are in proportion to the statutory redundancy payment multipliers) and thereby bring it within the specific exemption in the Equality Act 2010. Here’s a copy of the EAT’s decision: http://www.bailii.org/uk/cases/UKEAT/2013/0094_12_0402.html For further information please contact Marcus Rowland (marcus.rowland@wiggin.co.uk / 0207 927 9677) or Seth Roe (seth.roe@wiggin.co.uk / 01242 631 262)