The Employment Appeals Tribunal (EAT) has sent a case back to a tribunal for a re-hearing to consider whether redundancy dismissal, where the timing meant an employer avoided significant pension costs, could amount to age discrimination.
In the case of Sturmey v Weymouth and Portland Borough Council, it is being considered whether a genuine redundancy dismissal can amount to age discrimination due to its timing and whether bringing the date of a redundancy forward to avoid significant pension costs can be justified.
Sturmey was dismissed on the grounds of redundancy as part of a reorganisation, which took effect just a few days before her 55th birthday.
If she had been aged 55 or over she would have been entitled to an immediate pension.
Sturmey argued that the timing of her dismissal amounted to unlawful age discrimination.
The previous tribunal dismissed her discrimination claim, holding that her age had nothing to do with the dismissal and a younger person in comparable circumstances would also have been dismissed.
The tribunal also stated that even if age was a factor in the timing of the dismissal, saving the Council and its taxpayers significant sums was sufficient justification for the dismissal.
The EAT took a different view and upheld her appeal.
It held that the tribunal had not referred in its decision to evidence which demonstrated that the timing of the decision was of significance to the employer, which indicated that Sturney may have been dismissed earlier than would otherwise have been the case.
The EAT also pointed out that this case did not lay down a general principle that skipping over a redundancy process because of an employee’s age will always be justified as a proportionate means of achieving a legitimate aim.
The case was remitted to a fresh tribunal panel.
Andrew Brown, employment lawyer at Anderson Strathern Solicitors, said: “Pension costs can be substantial and will, for many employers, be a significant consideration during redundancy processes.
“This case emphasises that cost saving alone is not sufficient justification for discrimination and great care must be taken when pension costs are a factor.”