Employment lawyers have given a mixed response to an eagerly anticipated Court of Appeal (CoA) ruling on whether discrimination can be justified by saving costs.
Ruling in Woodcock v Cumbria Primary Care Trust, Lady Justice Arden, Lord Justice Rimer and Mr Justice Ryder found that former Cumbria Primary Care Trust (PCT) chief executive Nigel Woodcock was not discriminated against because of his age.
Woodcock instructed DLA Piper partner Michael Burns and Old Square Chambers employment barristers Paul Gilroy QC and Deshpal Panesar.
They argued that in making Woodcock redundant just short of his 50th birthday the PCT had avoided having to make a significantly increased pension payout.
However, Capsticks partner Jacqui Atkinson, who instructed Outer Temple Chambers’ Andrew Short QC and Keira Gore, defended the health trust’s position that
making Woodcock redundant and avoiding a potential £1m payout was a legitimate business aim.
The CoA found in favour of the PCT and refused Woodcock permission to seek an appeal at the Supreme Court – rubberstamping its decision as final.
Woodcock had previously appealed Carlisle Employment Tribunal and Employment Appeal Tribunal rulings against him.
In giving its verdict, the CoA panel outlined that cost alone can never justify age discrimination, but that as a matter of common sense it must be considered when determining whether a dismissal or redundancy, which is discriminatory, may be justified.
Rimer LJ said: “Almost every decision taken by an employer is going to have regard to costs.”
Following the ruling, DAC Beachcroft equality and discrimination head Rachel Dineley said: “This says cost can come into the equation, but must not be the equation itself.
“It’s a complex juggling exercise for the employer between different age groups and balancing the books.
“What we don’t have from this case is a magic formula – nor could we have expected it. Every case always turns on its facts.
“Employers will undoubtedly take a good deal of comfort from this decision. It’s very rare for an employer to try to justify discriminatory action simply to save cost, they take tricky daily decisions on allocating money and don’t do so in a vacuum.
“Unquestionably this is more helpful to employers than employees, who will be disappointed. Most people will welcome it as a reasoned decision.”
However, Daniel Barnett, employment law barrister at Outer Temple, claimed the ramifications would be “wide-ranging”.
He said: “The effect will be that some employers will be able to defend certain discrimination claims on the grounds that it’s cheaper to discriminate than not to discriminate.
“For example, it’ll be easier for employers to refuse to make adjustments for disabled employees because of cost.
“It will also be possible to dismiss long-term sick employees earlier, because of the cost of keeping them on the books and it will probably mean last-in, first-out becomes acceptable again as grounds for redundancy, having all but disappeared since 2006 in the light of age discrimination laws.
“Older workers could be discriminated against as this judgment makes it easier for employers to refuse to provide benefits such as health insurance cover to older workers, on grounds of increased premiums”.