The Court of Appeal decision in Woodcock v Cumbria Primary Care Trust [2012] EWCA Civ 330 is an interesting case that considers the justification of age discrimination on costs grounds.
Mr Woodcock, the chief executive of North Cumbria Primary Care Trust was made redundant without full consultation with the effect that his employment terminated prior to him becoming entitled to a significantly enhanced pension (worth between £500,000 and £1,000,000). His role was legitimately redundant and the Primary Care Trust had given him the opportunity to apply for alternative roles and guaranteed his employment for a certain period of time. The Trust were concerned however that in trying to arrange consultation meetings, Mr Woodcock was delaying the process so that his notice could not expire before his 50th birthday, when he would become entitled to the enhanced pension. To protect taxpayers' money, the Trust decided to give him notice of redundancy prior to completing the consultation process. Mr Woodcock alleged age discrimination.
Previous case law has established that discrimination cannot be justified on the grounds of costs alone, although costs can be take into account with other factors (Cross and others v British Airways plc [2005] IRLR 423). While on the face of it, it appears as though the Trust's decision to terminate early was motivated purely by the desire to save the Trust money, which would not be justifiable according to this rule, the Court of Appeal has now upheld the decision to reject Mr Woodcock's claim for age discrimination on the basis that it could be justified.
However, in reaching its decision the Court of Appeal did not overturn the decision in Cross v British Airways, but instead said that the Trust's actions were not aimed only at saving costs but were also to give effect to the genuine decision to terminate Mr Woodcock's employment by reason of redundancy. This was a legitimate aim and in the circumstances was proportionate.
Comment: While this decision appears to make it easier for employers to succeed in cost based arguments, provided they can put forward some other purpose for the discriminatory treatment, employers should be cautious about relying on this decision to dismiss older workers in order to avoid incurring additional pension liability. Repeated references were made in this case to the generous consultation period already allowed to Mr Woodcock and to that fact that his pension would have been an undeserved windfall as the redundancy process could legitimately have been concluded before his 50th birthday. Without these particular facts, a different conclusion may well have been reached.
http://www.bailii.org/ew/cases/EWCA/Civ/2012/330.html
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