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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.
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