The Employment Tribunal that heard the high-profile
case of age discrimination between Peter Bloxham and City law firm
Freshfields Bruckhaus Deringer yesterday ruled that there had been
discriminatory treatment but that this was justified. The case
highlights the fact that even if an employer engages in direct
discrimination under the Employment Equality (Age) Regulations
2006, they are able to use the defence of justification, and
provides an indication of how this may be applied by tribunals.
Mr Bloxham had claimed that the transitional
pension scheme operated by Freshfields on the closure of its
existing pension scheme was directly discriminatory. Under
the old scheme and the transitional arrangements, a partner who was
54 at the date of closure of the scheme and retired with consent
would be subject to a discounted pension whereas those who were 55
and over at that time would receive their full entitlement. As Mr
Bloxham was 54 and had only received a discounted pension he had
suffered less favourable treatment on grounds of age.
However, under the Regulations, it is a defence to
show that the treatment was a proportionate means of achieving a
legitimate aim. The Tribunal found that Freshfields had a
legitimate aim in reforming its pension arrangements to reduce the
‘intergenerational unfairness’ caused by the structure
of the existing scheme. If the scheme was not reformed, younger
partners would contribute more and more to pensions yet would
receive smaller and smaller pensions. Importantly, in reaching this
view, the Tribunal stated that it would be ‘an error of
law to focus solely upon the treatment and not consider the context
in which the treatment occurs. It seems to the Tribunal that this
will be particularly necessary in cases of age discrimination
because of the need to recognise the changes to the treatment of
persons of one age or age group may, as in the instant case,
directly affect to some extent the treatment of persons in a
different age group.’
The Tribunal went on to consider whether
Freshfields had used a proportionate means of achieving this
legitimate aim, and listed the following factors as being of
particular importance:
- The reforms themselves were aimed at addressing an issue
whereby, apart from any issues of discrimination, there had been a
recognition that younger age groups were becoming increasingly
disadvantaged.
- That in such a process maintaining the status quo for those
most proximately affected is acceptable.
- That maintaining the status quo does not absolve the employer
from considering other steps.
- That improving the position of the consent group, already
protected by the transitional provisions, in the context of the aim
of the reforms would be and seen to be both unfair and
perverse.
- That even at the conclusion of the lengthy and through
consultation period leading to the reforms and by the end of the
Hearing before the Tribunal no less discriminatory alternative
could be put forward.
The case provides the first important judgment on justification in
benefit changes under age discrimination. Employers can now use the
above factors to consider whether any potentially discriminatory
practices they are using can be justified and whether any remedial
action is required. Of course, it is only an Employment Tribunal
judgment and may be appealed.