Enhanced redundancy payments for over 35s not age discriminatory
The EAT recently considered in Lockwood v Department of Work and Pensions whether making greater enhanced redundancy payments to employees over the age of 35 compared to employees aged under 35 amounted to direct age discrimination.
Miss Lockwood, aged 26, was employed by the Department of Work and Pensions and had almost eight years’ service when she successfully applied for voluntary redundancy. Under the Civil Service Compensation Scheme, Miss Lockwood, as a 26 year old leaver with almost eight years’ service was entitled to a severance payment of almost £11,000. Had Miss Lockwood been over 35 with identical length of service, she would have been entitled to receive almost £29,000, approximately £17,500 more than she received.
Miss Lockwood brought a claim for direct age discrimination as a result of this disparity in treatment, however, the Employment Tribunal dismissed Miss Lockwood’s claim on two grounds:
- Firstly, that there was a “material difference” between her age (under 35) and the older comparator age group (over 35), and so it was not appropriate to compare the treatment of those groups; and
- Secondly, even if that was not correct, the less favourable treatment of the younger age group was objectively justified.
The EAT agreed. In relation to the first point, the EAT held that Miss Lockwood’s comparator was not truly comparable (because of the comparative difficulties suffered by older workers on being dismissed). In relation to the second point, the EAT found that the disparity in treatment was objectively justified and that the Department of Work and Pensions had adopted a proportionate means of achieving their legitimate aim; “to produce a proportionate financial cushion for workers until alternative employment is found when balanced against the disparate treatment of younger workers”.
This decision is of particular relevance to employers that have historic or collectively agreed enhanced redundancy terms which have age and/or length of service factors. It is interesting that the EAT so readily accepted that there was a legitimate social policy aim in providing financial help to the age group who are likely to suffer most on being made redundant.
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