Age Discrimination and Contractual Redundancy Payments….
by Philip
This particular case turns on its facts. ICI have a contractual enhanced redundancy scheme. The scheme expressly provides the following:
(1) An employee of up to the age of 35 is paid 58.33% of relevant pay.
(2) An employee aged 40 receives 97.22% of relevant pay.
(3) An employee aged 45 receives 136.11% of relevant pay.
(4) Employees aged between 50 and 57 are paid 175% of relevant pay.
(5) The figures reduce between the ages of 57 and 61 until an employee who is aged over 61 years and 4 months is paid only 50% of relevant pay.
The EAT have allowed a limited appeal on Age Discrimination as the issue of justification was not dealt with properly. In summary justification succeeds where the scheme was a proportionate means of achieving a legitimate aim.
Whilst the Tribunal found the aim to be legitimate (compensating those older employees who may find it hard in the jobs marketplace, the ones at 57 + had the Company pension cushion). The Tribunal did not adequately consider the issue of proportionality, which in this case meant looking at the impact of the discrimination on the particular employee, who in this case was 35, and therefore a good 40% worse off than someone 5 years older.
The Tribunal is re-considering that point. The case probably has limited effect as not many enhanced redundancy payment schemes expressly refer to age and have such a variance in percentages.
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