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Age discrimination ruling reassures employers seeking to save costs

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A law firm has told business leaders that they can take "comfort" from a recent ruling on age discrimination.

RN Woodcock, former chief executive of North Cumbria Primary Care Trust (PCT), had unsuccessfully applied for a new role following the merger of a number of PCTs and had been given 12 months notice in order to preventing him qualifying for early retirement at 50.

In 2009 the Employment Tribunal found that, although Woodcock had suffered direct discrimination by being dismissed without proper consultation, the trust’s aims of avoiding a significant cost were legitimate and their means proportionate. Last week the Employment Appeals Tribunal (EAT) upheld this decision.

Law firm Beachcroft said that the ruling should reassure employers seeking to save costs, although also stating that employers need to plan and consider any similar moves carefully.

Rachel Dineley, employment partner and head of the diversity and discrimination unit at the firm, said: "This decision gives employers much needed comfort as to whether you can objectively justify age discrimination when cost is a key issue. 

"In this case the steps taken by the employer to avoid the employee securing a ‘windfall’ were justified. 

"The approach is consistent with other appeal cases where tapering or the capping of redundancy payments has been found to be legitimate.

"Much will depend on the facts (including the timing and process followed) in any particular case. The Woodcock decision contrasts with an earlier decision (also from the President of the EAT) in which the discriminatory treatment of a prospectively redundant employee was not lawful.  Perhaps most important of all, the EAT has cast doubt on the case of Cross v British Airways, that ‘cost alone’ can never constitute objective justification.

"With careful planning and proper consideration of relevant issues, it should now be easier for employers to seek to save money (including taxpayers’ money, in public sector organisations) when conducting redundancy and restructuring exercises.  In the current climate, the case is very welcome and well timed."