Court of Appeal
An employment tribunal had been entitled to find that, although an employee's age had been the reason for his dismissal without proper consultation, the dismissal had been justified because it was an entirely legitimate aim for an employer to dismiss an employee who had become redundant and the employer had not justified its treatment solely on cost grounds.
The appellant (W) appealed against a decision to dismiss his claim for age discrimination against his former employer, an NHS trust.
W had been employed by the trust as a chief executive but his post was destined to disappear when a number of trusts merged and he was not selected for a successor post. W was given 12 months' notice of dismissal on redundancy grounds without proper consultation when he was just approaching his 49th birthday. The timing of the notice had deprived W of the benefit of taking early retirement at an enhanced pension. The tribunal dismissed W's age discrimination claim, finding that, although the treatment was discriminatory, it was justifiable as being a proportionate means of achieving a legitimate aim for the purposes of the Employment Equality (Age) Regulations 2006 reg.3. The tribunal also found that consultation would have achieved nothing because W wanted a chief executive job and no such job was available. On appeal, the EAT found that whilst cost alone could not justify a discriminatory act, cost plus some other factor could and the tribunal had adopted a "cost plus" approach since it was an entirely legitimate aim to dismiss an employee who had become redundant.
W submitted that (1) the finding of the tribunal that consultation with W would have achieved nothing was perverse; (2) the trust had failed to show that the treatment was directed at achieving a legitimate aim because mere cost saving could not be a legitimate aim and it could only be so if it was linked to a non-cost factor.
HELD: (1) There was no principled basis upon which the court could re-open the findings of the tribunal that consultation with W would have achieved nothing. There was no evidence that W had been prepared to consider applying for a range of trust jobs below the level of director. To establish perversity in respect of the tribunal's findings, W had to make out an overwhelming case that the tribunal had reached conclusions that no reasonable tribunal would have reached and W had not even got close to making such a case, Crofton v Yeboah  EWCA Civ 794,  I.R.L.R. 634 considered. Furthermore, it was difficult to identify any general unfairness in the trust's conduct towards W. W had in practice had the benefit of an informal consultation and he had had an unusually generous period in which to identify alternative work (see paras 52-54 of judgment). (2) It was clear from the authorities that considerations based on cost alone, or on economic or financial factors alone, could not justify treatment that was discriminatory on the grounds of age, Cross v British Airways Plc  I.R.L.R. 423 and Redcar and Cleveland BC v Bainbridge  I.C.R. 249 considered. In the instant case, it was not correct to characterise the trust's treatment of W as no more than treatment aimed at saving or avoiding costs and not a means of achieving a legitimate aim and therefore incapable of justification. W's dismissal notice was not served with the aim of dismissing W before his 49th birthday in order to save the trust the expense it would incur if he was still in its employ at 50. It was served with the aim of giving effect to the trust's genuine decision to terminate his employment on the grounds of his redundancy. The EAT had no doubt that the dismissal on grounds of redundancy was a legitimate aim. It could not cease to be a legitimate aim simply because, if there was no dismissal, the employer would continue to incur costs that such dismissal was directed at saving. The tribunal and the EAT were also correct in saying that it was a legitimate part of that aim for the trust to ensure that, in giving effect to it, the dismissal also saved the trust the additional element of costs that, had it not timed the dismissal as it did, it would be likely to have incurred. Furthermore, the trust's treatment was proportionate to the effect upon W (paras 67-71).
 IRLR 491 :  Eq LR 463 :  ICR 1126
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