EAT finds age discrimination in redundancy justified to avoid a windfallWoodcock v Cumbria Primary Care Trust [2010] UKEAT 0489_09_1211 | |||
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25/11/2010
In this case the employee was unfairly dismissed, the dismissal being timed to avoid paying out a large early retirement package. Woodcock v Cumbria Primary Care NHS Trust (EAT,Underhill P) has argued (whilst emphasising that it did not intend to depart here from previous authorities), that an employer might rely solely on cost, and thus contrary to the Cross v BA "cost plus other factor" approach, when justifying discrimination. The EAT believed that the "cost plus" approach results in "artificial game-playing" to "find the other factor". The EAT suggested that it is legitimate for the employer to only consider the cost where the avoiding of discrimination be disproportionately high. In rejecting the claimant's appeal, the EAT decided that the ET was correct in applying the "costs plus" approach to age discrimination. The ET was however wrong in its application of the breach of the now repealed statutory disciplinary and dismissal procedures prescribed by Schedule 1 of the Employment Act 2002 and in effect at the time of the dismissal. The Trust had conceded that there had indeed been a breach of the statutory procedures which meant the Tribunal should have made a finding of "automatic" unfair dismissal under section 98A (1) of the Employment Rights Act 1996. Instead the ET argued that the breach of statutory procedures would have made no difference as the claimant would have in any case been dismissed for redundancy. The ET then applied section 98A (2) of the Employment Rights Act to declare that the dismissal was fair. The EAT disagreed, ruling that after Alexander v. Brigden Enterprises Ltd [2006] ICR 1277) that section 98A (2) has no application in a case of "automatic" unfair dismissal under sub-section (1). Although the EAT overturned the ET's decision of it that decision was of little effect as the claimant was not seeking reinstatement or re-engagement or have the case remitted to the Tribunal for an assessment of remedy. The EAT found that the act of dismissal without consultation was direct discrimination on the grounds of age but carried out for a legitimate aim (avoiding a considerable enhanced payment). The EAT stressed that although avoiding cost is not itself a legitimate aim the decision in Cross v. British Airways Plc ruled that it may be a legitimate aim when the discrimination served to prevent an employee receiving a windfall (Loxley v. BAE Systems). But although this ruling may be tempting for employers seeking to dismiss workers early so as to avoid paying out on retirement packages later on, the EAT here said that this ruling applied to the aim of the respondent in ending a relationship in a situation of genuine redundancy (where the number of PCT's had been reduced), where the claimant already been allowed to work for a longer period after redundancy had first been considered, and where the claimant had not been willing to accept work at a lower level. The judge's reasoning is summarised at para 27 and reproduced (slightly abridged) below: 27. (1) The act which the Tribunal found to be prima facie discriminatory - that is, discriminatory unless justified – was not the Appellant's dismissal as such but its timing, and more particularly the giving of notice prior to the planned consultation meeting. That is the effect of paras. 78 and 80. (2) That act was held to be done on the grounds of his age because the decision as to timing was taken in order to avoid the Appellant reaching pensionable age: again, that is clear from paras. 78 and 80. (Such motivation falls within the scope of the term "on grounds of age": see London Borough of Tower Hamlets v. Wooster [2009] IRLR 980, at para. 47 (p. 988).) (3) The avoidance of the additional costs liability which it would incur if the Appellant reached pensionable age constituted the Trust's "aim" in serving notice at the date that it did (The exercises of defining the aim and assessing its legitimacy may in practice overlap and tribunals should not get too bogged down in elaborate analysis of the statutory formula: cf. our observations on a similar point in Pulham v. London Borough of Barking and Dagenham [2010] ICR 333, para. 15 (pp. 343G–344A).) (4) That aim was legitimate in seeking to avoid incurring costs unnecessarily and that there was no need to postpone giving notice of dismissal beyond the Appellant's 49th birthday because he was clearly redundant and no alternative job had been found: in those circumstances the chance of taking early retirement in the final weeks of his notice period would be a "windfall for him". The reference to Loxley is to the decision of this Tribunal in Loxley v. BAE Systems Land Systems (Munitions & Ordnance) Ltd [2008] ICR 1348. The "windfall" there discussed was of a very specific nature (see the exposition in Kraft Foods Ltd. v. Hastie (UKEAT/0024/10) [2010] EqLR 18); but the Tribunal was evidently taking the decision as authority for the proposition that it is in principle justifiable to deprive a person of a benefit on the grounds of his age if that benefit was one which he had no legitimate right to expect. It may be worth spelling out the metaphor inherent in the term "windfall": it refers to fruit which has fallen by itself and which the picker has not had to go to the effort of reaching or climbing for. It thus most directly applies to any unearned benefit, i.e. one for which the recipient has not had to work; but it can be applied more generally to a benefit which he had no legitimate entitlement to expect. The claimant had claimed support from Cross v. British Airways plc [2005] IRLR 423 that, "cost alone cannot be a legitimate aim for the justification of discrimination", arguing that the PCT relied only on the costs factor. Burton P. in Cross cited decisions of the European Court of Justice and national courts saying that an employer can not justify discrimination "solely on the ground that avoidance of such discrimination would involve increased costs" (Hill and Stapleton v. Revenue Commissioners [1999] ICR 48, Kutz-Bauer v. Freie und Hansestadt Hamburg [2003] IRLR 368, and Steinicke v. Bundesanstalt fur Arbeit [2003] IRLR 892, Jenkins v. Kingsgate Ltd [1982] ICR 592, Bilka-Kaufhaus v. Weber von Hartz [1987] ICR 110, and Rainey v. Greater Glasgow Health Board [1987] ICR 129). The Cross appellants cited ECJ cases from De Weerd (nee Roks) v Bestuur de Bedrijfsvereniging voor de Gezondheid [1994] ECR 1-571. For Burton the concept of proportionality was important, that the employer cannot rely solely on considerations of cost but needs to balance these along with, "other justifications if there are any", the "cost plus (some other factor)" and accepted by Elias P. in Redcar and Cleveland Borough Council v. Bainbridge [2008] ICR 249n. And Judge Underhill in this case hesitates to run counter to the 'cost plus' argument despite arguing that this can not hold true in all situations, such as where on the one hand there is a trivial impact of discrimination, whilst enormous cost in vitiating the discrimination. The judge notes a problem of the 'cost plus' in that it, 'tends to involve parties and tribunals in artificial game-playing of find the other factor'. But he notes on the other hand that, "If the matter were free from authority it would seem to us that an employer should be entitled to seek to justify a measure producing a discriminatory impact – or, in the case of age discrimination, an act done on discriminatory grounds – on the basis that the cost of avoiding that impact, or rectifying it, would be disproportionately high." In the event Judge Underhill found the plus factor here as the need to avoid unjustified windfalls. It is hard to avoid thinking that this 'plus' is just another way of defining the cost, and so gives the impression that the judge had agreed with the ET on this point not to award the 'windfall' and was casting around for a justification, however nebulous. This isn't necessarily a criticism of the judge as the cost to the public purse would have been very substantial, and the Claimant did in any case pocket the considerable sum of £220,000. Few would argue here that justice had not been done, and that is after all what a judge should be about. Which brings us full circle, back to simplifying the tribunal system, at least for low value claims with a 'costs minus' system, i.e. minus the lawyers and barristers, whereby the tribunals would take a more active role in the proceedings and where, as in the small claims court, low value claims would be treated expeditiously with no opportunity for the fat cats to make a killing. |
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| The transcript of this case follows:- Woodcock v Cumbria Primary Care Trust [2010] UKEAT 0489_09_1211 | |||
| 2010 Workers whose employment contract was made with a company that did not actually employ them are still entitled to TUPE protections upon transfer. The "Transferor" is the company in the group that they actually worked for - Albron Catering BV v FNV Bondgenoten C-242/09 Being incorrectly summarily dismissed for misconduct still amounted to a fair but wrongful dismissal - Weston Recovery Services v Fisher [2010] UKEAT 0062_10_0710 Not unfair dismissal despite having occurred during the protected consultation period contrary to s. 188 TULRCA s.188(8) - Hammonds LLP & Ors v Mwitta [2010] UKEAT 0026_10_0110 The Court of Appeal refers the timing of worker consultation under TUPE to the ECJ - United States of America v Nolan [2010] EWCA Civ 1223 A redundancy consultation means explaining the scoring to the employee and seriously considering his comments - Pinewood Repro Ltd v. Page [2010] UKEAT 0028_10_1310 The effective date of termination is not necessarily when a letter is received, but when it can reasonably be expected to have been read - Gisda Cyf v Barratt [2010] UKSC 41 For unfair dismissal length of service purposes, working under a different contract did not break continuity of employment - Hussain v Acorn Independent College Ltd [2010] UKEAT 0199_10_0809 The previous employer will be liable for victimsing his worker through a reference to a prospective employer - Bullimore v Pothecary Witham Weld Solicitors & Anor [2010] UKEAT 0189_10_2109 An employer's allegations must be spelled out. Euphemistic speech is not acceptable when disciplining or dismissing workers. - Celebi v Scolarest Compass Group UK & Ireland Ltd [2010] UKEAT 0032_10_2807 Table listing the changes to UK discrimination legislation being introduced by the Equality Act 2010 ET is allowed flexibility in deciding whether the burden of proof has shifted - Canadian Imperial Bank of Commerce v. A Beck [2010] UKEAT 0141_10_2408 The employer's ability to pay is irrelevant - Tao Herbs & Acupuncture Ltd v Jin [2010] UKEAT An absolute contractual right of substitution undermines the possibility of worker status - Community Dental Centres Ltd v. Sultan- Darmon [2010] UKEAT 0532_09_1208 Pension loss: "simplified" and "substantial" compensatory approaches - Sibbit v The Governors of St Cuthbert's Catholic Primary School [2010] UKEAT 0070/10/ZT TUPE: Failure to consult doesn't give an individual the right to claim unfair dismissal - Nationwide Building Society v. Benn & Ors [2010] UKEAT 0273_09_2707 Limits on Redundancy Payments affecting older workers are not Age Discrimination - Kraft Foods UK Ltd v. Hastie [2010] UKEAT 0024_10_0607 Employees must be informed of changes to collective agreement terms - Worrall v Wilmott Dixon Partnership [2010] EAT UKEAT/0521/09/DM An employer can not plead its own irrationality in seeking to amend a compromise agreement - Gibb v Maidstone & Tunbridge Wells NHS Trust [2010] EWCA Civ 678 Time limits may be extended following wrong information from an employer (but not an adviser) - Northamptonshire County Council v Entwhistle [2010] UKEAT/0540/09/ZT Even after the Unite decision unions must continue to careful with TULRCA compliance - British Airways Plc v Unite the Union [2010] EWCA Civ 669 A disability discrimination claim under the DDA must be for actual not perceived disability - Aitken v. The Commissioner of Police of The Metropolis [2010] UKEAT 0226_09_2106 A GP's opinion on depression is valid in an employment tribunal - J v DLA Piper UK LLP [2010] UKEAT 0263_09_1506 University and College Union (UCU)backs antisemite who incited violence against jews Retirement and re-employment is a reasonable adjustment - Chief Constable of South Yorkshire Police v. Jelic [2010] UKEAT 0491_09_2904 Histadrut condemns violence, describes extent of cooperation with palestinian trade union Palestinian General Federation of Trade Unions (PGFTU) Where an employer is contemplating disciplinary action the thoroughness of the investigation needs to reflect the seriousness of the consequences to a worker - Salford Royal NHS Foundation Trust v Roldan [2010] EWCA Civ 522 Damages are not limited to the term of the breached fixed term contract (but reflect the total loss caused) - Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2010] EWCA Civ 571 The disclosing of without prejudice communications - Woodward v Santander [2010] UKEAT/0250/09/ZT Criterion for awarding uplifts under the Dispute Resolution Procedures - Lawless v Print Plus [2010] UKEAT/0333/09/JOJ A local council is a single establishment thus allowing white collar workers to use manual workers as comparators - City of Edinburgh v Wilkinson & ors [2010] UKEATS/0002/09/BI A compromise agreement can be valid even though the claimant does not understand it - McWilliam & Others v Glasgow City Council When using the closed procedure for national security purposes the claimant must still be provided with the gist of the employer's case - Home Office v Tariq [2010] EWCA Civ 462 An employer can not repair a fundamental breach of contract. It is up to the employee whether to resign and claim constructive unfair dismissal. - Buckland v Bournemouth University Higher Education Corp [2010] EWCA Civ 121 A worker can not claim constructive dismissal if he is in breach of the duty of trust and confidence - Bateman & Ors v. Asda Stores Ltd [2010] UKEAT 0221_09_1102 A worker can not claim constructive dismissal if he is in breach of the duty of trust and confidence - Aberdeen City Council v McNeill [2009] UKEAT 0037_08_1011 BA dress code forbidding the open display of faith symbols was not discriminatory - Eweida v British Airways Plc [2010] EWCA Civ 80 When deciding whether to allow an amendment the lateness of the application is only one factor to be taken into account by the employment judge - Baker v The Commissioner of Police of The Metropolis [2010] UKEAT 0201_09_0502 National courts should should strike down discriminatory legislation - Seda Kücükdeveci v Swedex GmbH & Co. KG [2010] ECJCase C-555/07 Judges restrict employers' use of the illegality defence against employee unfair dismissal claims - SAN LING CHINESE MEDICINE CENTRE v LIAN WEI JI - [2010] EAT UKEAT/0370/09/ZT There is a right to legal representation at a disciplinary which might result in the loss of the right to practise a profession - G, R (on the application of) v X School & Ors [2010] EWCA Civ 1 Cabin crew spending 5% of their time in the UK were considered to have worked partly at an establishment in Great Britain. - BA v Mak EAT [2010] UKEAT/0055/09/SM The 'genuine occupational requirement' rule may apply to a maximum age for employment - Wolf v Stadt Frankfurt am Main [2010] Case C-229/08 ECJ Different dress codes do not necessarily amount to sex discrimination - Dansie v. The Commissioner of Police for The Metropolis [2009] UKEAT Certain conditions must exist for the obligation to carry out a risk assessment for a pregnant worker to arise - ONeill v. Buckinghamshire County Council [2010] UKEAT 2009 An employment tribunal may decide if a compromise decision is unenforcable - Industrious Ltd v Horizon Recruitment Ltd & Anor [2009] UKEAT Registrar claiming right to refuse to officiate at civil weddings loses religious discrimination case - Ladele v London Borough of Islington [2009] EWCA Civ 1357 A philosophical belief based on science is protected by the Employment Equality (Religion or Belief) Regulations 2003 - Grainger Plc v Nicholson [2009] UKEAT/0219/09/ZT Christian counsellor who would not help same sex couples was not discriminated against - McFarlane v Relate Avon Ltd [2009] UKEAT 0106_09_3011 Under TUPE the obligation to inform always applies, even when no measures are contemplated relating to the transfer - Cable Realisations Ltd v GMB Northern [2009] UKEAT The Court of Appeal rules on Harassment and 'Oppressive and Unacceptable' behaviour Veakins v Kier Islington Ltd [2009] EWCA Civ 1288 For s4A(3) of the DDA to apply the employer must have known (or ought to have known) that the employee was disabled and that the disability would affect him in the manner described in section 4A(1) - DWP v Alam [2009] UKEAT 0242_09_0911 A discrimination case may not proceed on the mere possibility that evidence might emerge during cross examination - ABN Amro Management Services v Hogben [2009] UKEAT 0266_09_0111 In cases of discriminatory dismissal tribunals may reduce compensation if the worker would in any event have been dismissed - Chagger v Abbey National Plc & Anor [2009] EWCA Civ 1202 |
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