The Court of Appeal has ruled that enhanced redundancy terms for older employees are lawful under age discrimination legislation.
The judgement, on 11 October, relates to the case earlier this year of Romily Lockwood v Department of Work and Pensions (DWP) and Cabinet Office in which the former administrative officer for the DWP claimed that the voluntary redundancy scheme offered by the organisation discriminated against her because of her age.
When Lockwood opted to take voluntary redundancy at the age of 26, she received a payment of £10,849. However, if she had been over the age of 35, she would have been entitled to £17,690. Lockwood claimed this meant the enhanced voluntary redundancy scheme discriminated against her because of her age.
The Court of Appeal, dismissed Lockwood’s case for re-trial at the Employment Tribunal, ruling that enhanced redundancy payments for older workers can be objectively justified.
Helen Cookson, senior employment lawyer at law firm Trowers and Hamlins, said: “Provided employers can show their scheme is objectively justified by a strong policy objective, an enhanced redundancy payment for older workers will not amount to direct age discrimination.
“In the Lockwood case, the Employment Tribunal had accepted statistical evidence that younger people had fewer financial and family obligations, so therefore could react more easily and rapidly to the loss of their jobs than older people.
“The Court of Appeal accepted that the Civil Service had been entitled to use that as the basis of a policy, which then had a disparate impact on employees of different age groups.
“It is important that employers recognise that, like the DWP, they may be required to justify treating workers of different age groups differently. The justification must be evidence-based, and not rely on any stereotypical or historical assumptions. Employers should review the underlying aims and reasons for policies that may be discriminatory, in effect, to ensure differences in treatment can be justified.”