Clarkslegal LLP - Solicitors in Reading and London

Legal Updates

Age discrimination for the over 50s: taking into account early retirement costs was direct discrimination

22 January 2016 #Employment


The EAT has overruled a tribunal’s decision, holding the fact that employees over 50 were entitled to early retirement benefits under the pension scheme (making their severance costs much higher than for employees aged under 50) was not a "relevant circumstance".

Since the extra cost was a direct result of the Claimant's age, it was prima facie direct discrimination for RBS to have taken it into account. The correct approach for the Tribunal was to consider whether the less favourable treatment would have occurred “but for” the protected characteristic.

The case has been referred back to the Tribunal to determine if RBS’ actions can be justified given the prima facie actions of discrimination.

In Donkor v Royal Bank of Scotland UKEAT/0162/15 the Claimant was a regional director for the Royal Bank of Scotland (“RBS”). A restructure took place in 2012, in which RBS determined (on paper) out of the four regional directors of the time, who would to be interviewed for new roles and who would be invited to apply for voluntary redundancy. There were two regional directors over the age of 50 (including the Claimant) and two under 50. The two directors who were under 50 successfully applied for voluntary redundancy. When RBS calculated the severance costs for the two employees over 50 (as they would be eligible for a non-discounted pension), the costs were found to be so substantial that they decided to give the Claimant and the other regional director the opportunity to apply for other roles rather than invite them to take voluntary redundancy.

The Claimant then, following a further restructuring in 2013, was invited to take voluntary redundancy. By this point the pension rules for RBS had changed, which raised the minimum age at which those opting for voluntary redundancy could receive a non-discounted pension from 50 to 55. The Claimant therefore no longer could receive this benefit (as he was younger than 55 at the time).   

The tribunal initially held that RBS had not discriminated against the Claimant on the basis of the Claimant’s age by deciding not to invite him to apply for voluntary redundancy in 2012. The Tribunal cited the cost, legal risk and need to obtain approval if they were to offer the Claimant voluntary redundancy as the reasons for the bank’s decision, rather than his age. 

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

Read more articles

Michael Hibberd

Michael Hibberd
Senior Solicitor

E: mhibberd@clarkslegal.com
T: 0118 953 3905
M: 0779 900 7511

Contact

Employment team
+44 (0)118 958 5321