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Chief executive was not victim of age discrimination

Court of Appeal ruling will make it easier for employers to justify cost-cutting

22 March 2012

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The former chief executive of a primary care trust was not the victim of age discrimination when he was made redundant a few weeks before he would have qualified for early retirement, the Court of Appeal has ruled.?Nigel Woodcock claimed that considerations based on cost alone could not justify treatment that was discriminatory on the grounds of age.?Daniel Barnett, employment law specialist at Outer Temple Chambers, said: “The Court of Appeal has overturned previous case law, and stated that employers are allowed to rely on cost savings in order to justify certain types of discrimination.?“The effect will be that some employers will be able to defend certain discrimination claims on the grounds that it is cheaper to discriminate than not to discriminate.?“This will make it easier for employers to justify cost-cutting measures on grounds of costs. The ramifications are wide ranging. For example, it will be easier for employers to refuse to make adjustments for disabled employees because of cost.”

The Court of Appeal heard that Woodcock was given 12 months’ notice of his dismissal just short of his 49th birthday, and without any consultation. ?Giving the leading judgment in Woodcock v Cumbria Primary Care Trust [2012] EWCA Civ 330, Lord Justice Rimer said the dismissal notice was not served on Woodcock with the aim “pure and simple” of dismissing him before his 49th birthday in order to save the expense of early retirement at an enhanced pension.?“It was served, and genuinely served, with the aim of giving effect to the trust’s genuine decision to terminate his employment on the grounds of his redundancy,” Rimer LJ said.?He said the EAT “had no doubt” that the dismissal of an employee on such grounds was a legitimate aim. ?“I agree, and it cannot in my view cease to be a ‘legitimate aim’ simply because, if there is no dismissal, the employer will continue to incur costs that such dismissal is directed at saving.?“I also agree with both the ET and the EAT that it was a legitimate part of that aim for the trust to ensure that, in giving effect to it, the dismissal also saved the trust the additional element of costs that, had it not timed the dismissal as it did, it would be likely to have incurred.”?Rimer LJ said it would have been “irresponsible” for the trust not to take into account cost considerations.??“Mr Woodcock had, by 2007, no right, entitlement or expectation to the enjoyment of the enhanced benefits that he would have enjoyed had he remained in the trust’s employment until he was 50. Had he in fact so remained so as to enjoy them, he would have been the beneficiary of a pure windfall.”?Rimer LJ said the trust “was fully entitled and had effectively resolved” to terminate Woodcock’s employment before his 50th birthday, but implementation was delayed, through no fault of its own but through a “chapter of accidents”.?While the lack of consultation in theory deprived him of an opportunity, the lord justice said it deprived him of nothing of value “because, as the employment tribunal found, consultation would have achieved nothing”.?Lord Justice Rimer dismissed Woodcock’s appeal. Mr Justice Ryder and Lady Justice Arden agreed.

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Termination