Supreme Court guidance on when a disadvantage is age discrimination

Citation

Drummond, J. (2012), "Supreme Court guidance on when a disadvantage is age discrimination", Human Resource Management International Digest, Vol. 20 No. 6. https://doi.org/10.1108/hrmid.2012.04420faa.001

Supreme Court guidance on when a disadvantage is age discrimination

Article Type: Employment law outlook From: Human Resource Management International Digest, Volume 20, Issue 6

Introduction

Age Discrimination has been unlawful since the Employment Equality (Age) Regulations 2006 came into force in October 2006. Age discrimination law is now found in the Equality Act 2010, the provisions of which are largely the same as the 2006 Regulations which it replaced.

In the sphere of employment it is unlawful for an employer to discriminate against someone he employs on the grounds of age in the terms he offers him employment, in the way he offers or refuses to offer him promotion, transfer, training or any benefit or by dismissing him or subjecting him to any other detriment. There are exemptions in the legislation including, for example, exemptions relating to certain pension provisions, some redundancy payments and to some service related benefits and genuine occupational requirements.

Compared with other types of discrimination, it can be harder to identify where a difference in treatment is age discrimination. This is partly because we are all young and we all grow old, unless we die first, so a disadvantage due to age can, at some time, affect all of us. It may be that older employees who are disadvantaged by a rule that favours younger employees, have enjoyed the benefits of that rule earlier in their career. It can be even more difficult to tell if there is age discrimination where the discrimination is indirect rather than direct. Direct age discrimination is where a person is treated less favourably because of their age. An employer indirectly discriminates against an employee where he applies to him a provision, criterion or practice that is applied equally to people who are in the employee’s age group and to those who are not, but which puts those of that employee’s age group at a particular disadvantage. In the case of both direct and indirect age discrimination, discrimination is not unlawful if the employer can show that the treatment or the provision, criterion or practice is a proportionate means of achieving a legitimate aim. This is known as justification.

In the first two age discrimination cases to reach the Supreme Court, Homer v. Chief Constable of West Yorkshire 2012 UK SC 15 and Seldon v. Clarkson Wright and Jakes 2012 UK SC 16 guidance has been given both as to what is indirect age discrimination and on the test of justification.

Indirect age discrimination

Mr Homer worked for the Police National Legal Database. He did not have a law degree and when he was hired there was no requirement for one. Some years later the requirement for a law degree was introduced for new entrants and for existing staff to be eligible for promotion to the highest of the pay grades. This meant that Mr Homer could not achieve the higher pay grade unless he gained a law degree, which would take him four years of part time study. When the new requirement came in Mr Homer was 62 and subject to a compulsory retirement age of 65. He would not, therefore, have been able to benefit from promotion to the higher paid grade before he had to retire.

The employer argued that what put Mr Homer at a disadvantage was not his age, but his impending retirement and that his case must be compared with others nearing the end of their employment for other reasons who were similarly disadvantaged, but not by reason of age. The Employment Appeal Tribunal and the Court of Appeal agreed but the Supreme Court did not. The Supreme Court said:

A requirement which works to the comparative disadvantage of a person approaching compulsory retirement age is indirectly discriminatory on grounds of age.

The Supreme Court continued that there is an “unreality” in differentiating between age and retirement. The disadvantage was that people in this age group did not have time to acquire a law degree. The reason that they did not have time to acquire a law degree was that they were soon to reach the age of retirement. If the requirement cannot be justified it can be modified to remove the disadvantage.

When considering whether or not a provision, criterion or practice is, on the face of it, indirectly age discriminatory, and therefore needs to be justified, it is necessary to carefully consider the impact it has on different age groups and to recognise that it may be age discriminatory even if it also disadvantages others for reasons unrelated to age. As the Supreme Court said in the Homer case:

The law of indirect discrimination is an attempt to level the playing field by subjecting to scrutiny requirements which look neutral on their face but in reality work to the comparative disadvantage of people with a particular protected characteristic.

Justification of age discrimination

Uniquely in discrimination law, in the case of age discrimination what would otherwise be direct discrimination is not unlawful if it can be shown that the treatment or the application of the provision, criterion or practice is a proportionate means of achieving a legitimate aim, that is it can be justified.

In the Seldon case the Supreme Court confirms the previous decisions of the European Court of Justice and the High Court that the task of justifying direct age discrimination is not identical to the task of justifying indirect age discrimination.

Under EU Council Directive 2000/78/EC, from which the UK age discrimination law is derived, justification of indirect age discrimination is built in to the concept of indirect discrimination and this is reflected in the UK legislation set out above. However, the possibility of justifying direct age discrimination under the directive is separate and different. This is not reflected in UK age discrimination law but UK age discrimination law must, where possible, be construed so as to give effect to the Directive.

The Supreme Court in the Seldon case considered European and UK case law. They concluded that, under the Directive, the only way that direct age discrimination can be lawful is where the aims of the discriminatory measure are social policy objectives, such as those related to employment policy, the labour market or vocational training. These are of a public interest nature rather than purely individual reasons relating to the particular employer’s situation, such as cost reduction or improving competitiveness. Flexibility for employers can be a legitimate aim but only in the pursuit of legitimate social policy objectives such as:

• •

  promoting access to employment for younger people;

• •

  the efficient planning of the departure and recruitment of staff;

• •

  sharing out employment opportunities fairly between the generations;

• •

  ensuring a mix of generations of staff so as to promote the exchange of experience and new ideas;

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  rewarding experience;

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  cushioning the blow for long serving employees who may find it hard to find new employment if dismissed;

• •

  facilitating the participation of older workers in the workforce;

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  avoiding the need to dismiss employees on the ground that they are no longer capable of doing the job which may be humiliating for the employee concerned; and

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  avoiding disputes about the employee’s fitness for work over a certain age.

Establishing that the measure is to further a legitimate aim is only the first step. To be justifiable, the measure must be appropriate and necessary to achieve that aim, weighing the detrimental effect on the employee suffering the discrimination against the importance of the legitimate aim to the employer.

The Supreme Court concluded that under UK law direct age discrimination can be justified if:

1. 1.

   there is a public interest in the legitimate objective which is:

2. 2.
   • •

     consistent with the social policy aims of the state, and

   • •

     is legitimate in the particular circumstances of the employment concerned; and

3. 3.

   the means used to achieve that objective are proportionate, that is they are:

4. 4.
   • •

     appropriate to that objective;

   • •

     are reasonably necessary to achieve it, that is, that there are no other less discriminatory ways of achieving it; and

   • •

     that this aim is in fact being pursued even if that aim was not contemplated at the time the measure was introduced.

It can therefore be harder to justify direct age discrimination than indirect age discrimination. In the case of direct age discrimination there will need to be a legitimate objective that is in the public interest. In the Seldon case staff retention and workforce planning and limiting the need to expel partners by way of performance management were found to be legitimate objectives that were both of public interest, being related to intergenerational fairness and to dignity, and were found to be related to the particular circumstances of the business in the case. The case was remitted to the Employment Tribunal on the question of justification. In the case of Homer referred to above, the Supreme Court confirmed that the range of aims which can justify indirect age discrimination (or indeed any other indirect discrimination) is wider than the aims which can justify direct age discrimination. In the case of indirect age discrimination the range of legitimate objectives is not limited to social policy but can encompass a real need on the part of the employer’s business. The Supreme Court clarified that to be proportionate for the purposes of justification, the measure had to be both an appropriate means of achieving the aim and reasonably necessary in order to do so, comparing the impact of the criterion upon the affected group as against the importance of the aim to the employer. The case was remitted to the Employment Tribunal on this question.

Conclusion

These two Supreme Court Judgments provide useful guidance on what is a new area of law which, as the Supreme Court said in the Homer case, many still find counter intuitive and in which difficult balances need to be struck between the competing interests of different age groups.

Joy DrummondEmployment Law Solicitor at Simpson Millar LLP, UK.

Acknowledgements

© Copyright 2011 Simpson Millar LLP SolicitorsTo find out more about how Simpson Millar LLP’s employment law team could help you visit: www.simpsonmillar.co.uk or call 0844 858 3499 to speak to Joy Drummond or 0844 858 3818 to speak to Asha Wije.This newsletter is intended for information purposes only and its content should not be applied to any particular set of facts or relied on without legal or other professional advice.