Why Tribunals shouldn't question your reasons for reducing workforce
Associate, Veale Wasbrough Vizards
It is well-established that in ordinary redundancy situations, tribunals cannot question an employer's commercial or economic reasons for reducing the workforce.
The recent case of Harrod v West Midlands Police confirms that the same logic applies to indirect discrimination claims.
The FactsPolice officers can be compulsorily retired in certain circumstance where they are aged 48 or over with at least 30 years' service. A policy was put in place across seven police forces, whereby all eligible officers were compulsorily retired in order to make necessary costs savings (Policy).
The officers brought age discrimination claims. The Employment Tribunal (ET) upheld their claims, holding that the Policy was discriminatory in that it removed a whole cross section of the workforce. The ET further held that the necessary cost savings could have been achieved through less discriminatory means.
The forces successfully appealed to the Employment Appeal Tribunal (EAT). The EAT held that the ET should not have focused on alternative ways of reducing costs in the way that it did. The officers appealed to the Court of Appeal (CA).
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The Court of Appeal's DecisionThe CA dismissed the officers' appeal. In an ordinary redundancy situation, the ET would not substitute its own views on a business case, for those of the employer's. This scenario was no different in that respect. It was not up to the ET to devise an alternative scheme involving the loss of fewer posts. It was also not up to the ET to determine how the forces should have pursued a different aim which would have had a less discriminatory impact. The forces were therefore entitled to make the compulsory redundancies in line with their original business plan.
Best PracticeThe rules around compulsory retirement in the police force do not apply more widely to the private sector. This case is nevertheless a useful reminder of the limitations of the tribunal's power in that it cannot normally substitute its own commercial analysis for that of the employer. It must instead focus on the process for implementing change - for example, was the process fair or did it discriminate against certain individuals or groups of individuals? In most cases, when looking at an employer's business case for change, the ET will do no more than ensure that the business case is genuine.
Employers should ensure that they assemble detailed business cases before tackling any restructure or redundancy programme. Where relevant, the business case should take into account any potentially discriminatory implications of the process and consider how these might be objectively justified.