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Law for Business

Knowhow - guidance - precedents

25 OCT 2013

Department of Work and Pension redundancy scheme discriminated against employees in their 20s - but was justified


In Lockwood v Department of Work and Pensions (1) Cabinet Office (2) (2013), the Court of Appeal has found that although the Department of Work and Pensions discriminated against a young employee on grounds of her age when applying their voluntary redundancy policy, the discrimination was objectively justified and hence lawful.

The case is helpful in clarifying what is meant by direct discrimination in general and also when discrimination based on age can be justified. It should be remembered that age discrimination is different from other forms of discrimination in that direct discrimination can be justified.

Ms Lockwood accepted voluntary redundancy from the DWP having worked from the age of 18 as an administrative officer for seven years with the Benefits Agency. Under the terms of the Civil Service Compensation Scheme, voluntary redundancy pay is enhanced for service over 30 and 35. As Ms Lockwood was 26 on taking redundancy, her redundancy pay of £10,894 was £17,690 less than it would have been had she been over 35 at the time she left and served the DWP for an identical length of service. She claimed age discrimination.

It was found that the employment tribunal and the Employment Appeal Tribunal had in comparing employees in Ms Lockwood’s position with those over 35, incorrectly come to the conclusion that there were material differences between the age groups and hence there was no discrimination. The evidence from the Office of National Statistics showed that individuals in the mid 20s had, compared to those in their mid 30, fewer financial and family obligations and could generally be expected to react more easily and rapidly to the loss of their jobs and greater flexibility could be expected of them.

The Court of Appeal found that this analysis was completely wrong, misunderstanding the nature of direct discrimination and who is the correct comparator. The comparator must be in the same position in all respects as the victim of discrimination except that the comparator is not a member of the “protected class”.

The Court used the analogy of race. In a race discrimination case, the comparator will often be a white person who is otherwise in the same, or not materially different position, than the claimant. The circumstances of the two cannot be different because of differences in race, as race is the protected characteristic. Similarly, a comparison between a 26 year old and a 36 year old cannot be invalidated because they are different stages of life. In other words, that fact that a 36 year old is expected to earn more but have more financial and family responsibility than a 26 year old are merely consequences of age.

The only issue was whether the difference in treatment in the voluntary redundancy scheme was justified.

The Court of Appeal was satisfied on the facts that the DWP had a legitimate aim in rewarding older employees on redundancy better than younger employees and that the redundancy scheme was a proportionate means of achieving that aim.

The case serves as a reminder that any differences in treatment between employees that relate to age are likely to amount to age discrimination (including for the DWP!) and hence must be justified.

Nick Huffer, Associate, Clarkslegal LLP
Tel: 029 2055 7554
Email: nhuffer@clarkslegal.com

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