The Employment Appeals Tribunal (“EAT”) in HM Land Registry v Benson has held that an employer was justified in selecting for voluntary redundancy on the basis of whom it would cost least to dismiss, despite the fact that this gave rise to indirect age discrimination against employees aged 50-54.
HMLR needed to reduce headcount and offered a voluntary redundancy/early retirement scheme, with enhanced benefits. It had more applicants than could be accommodated within the budget it had allocated to the project (£12 million) and so it undertook a selection exercise. Its principal selection criterion was to choose those whom it would cost least to dismiss, so as to maximise the redundancies achievable within the budget. This had a disproportionate impact on employees in the age group 50-54, who would have been entitled to early retirement on an unreduced pension. A tribunal upheld indirect age discrimination claims from five such employees, finding that HMLR could have afforded to select them, albeit that would have cost an extra £19.7 million.
The EAT allowed the employer’s appeal. The budget of £12m was part of the employer’s aim, which was legitimate. The tribunal had erroneously treated the £12m limit as an aspect of the ‘means’ adopted by the employer to achieve more broadly-defined aims. The tribunal’s finding that the extra £19.7m was not ‘unaffordable’ implied that it thought HMLR could find the funds without becoming insolvent. This was the wrong approach. In the EAT’s view, the task of the employment tribunal is to accept the employer’s legitimate decision as to the allocation of his resources as representing a genuine ‘need’, but to balance it against the impact complained of. Had the tribunal done that here, it would have found HMLR’s means proportionate.
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