Employment law
...indirect age discrimination can potentially be justified on the basis of saving costs to balance company books.
However, they did not uphold the claim for detriment, saying it had been presented out of time. The ET went on to explain that the time limit provisions outlined in the Employment Rights Act 1996 meant that the new contract had been a ‘one-off act’ and not an act which extended over a period of time. Considering whether it would have been reasonably practicable for a claim to be brought in time, the ET concluded that it was; there was no issue, from what they could see, that would have prevented such a claim. They also reluctantly declined to provide an uplift for failure to follow the ACAS (Advisory, Conciliation and Arbitration Service) code of practice, arguing that the code does not specify that it should apply in dismissals relating to a protected disclosure. The claimant appealed against both rulings. The EAT dismissed the appeal against the detriment ruling, but upheld that concerning failure to uplift the award. In forming their decision, the EAT outlined that it was important to differentiate between an ‘act’ and the detriment which follows it. Here, the act in question had been the imposition of a new contract and the claimant had not demonstrated that any additional various allegations against the organisation were related to his original protected disclosure. On that basis, this new contract had been a one-off event with lasting consequences but did not constitute a ‘continuing act’. Turning then to the ACAS uplift claim, the EAT held that the tribunal had failed to consider if the second protected disclosure, made the day prior to dismissal, could have been interpreted under the grievance section of the ACAS code. This is because the code refers to ‘concerns, problems or complaints’ raised by employees. To this end, they
remitted this point back to the ET for reconsideration.
were being placed at a disadvantage by the new policy. In the first instance, the ET agreed that the policy had served to indirectly discriminate against the claimant on the basis of his age. However, they dismissed the claim because the organisation’s actions had amounted to a proportionate means of achieving a legitimate aim. The ET explained that although the respondent’s aim had been to cut costs, there were also other factors to consider. The policy had been designed to enable them to ‘live within their means’ and was only intended to be temporary. Whilst it could not be justified on a long-term basis, it was a proportionate short-term response to the financial situation the respondent was facing. The claimant appealed to the EAT, which dismissed the appeal. In forming their decision, the EAT held that it was legitimate for an organisation, such as the respondent’s, to seek to break even. The employee appealed again to the CoA, arguing that the respondent’s defence was purely based on saving costs, contrary to the law, and that there was no evidence that this policy was short-term, meaning the ET had erred by relying on this in their judgment. The CoA also dismissed the appeal. Considering previous case law on the ‘cost-plus’ principle, the CoA agreed that a respondent cannot justify discrimination in pay purely on cost-saving grounds. Therefore, what needed to be determined was if their actions were simply to save money, or if they had other aims that they wished to achieve. The CoA held that the ‘cost-plus’ label, whilst not incorrect, could serve to turn attention from this key question. Agreeing with the EAT, the CoA held that the need to balance company books could be considered a legitimate aim, so the ET had been correct to place weight upon the situation facing the organisation. The CoA also rejected the idea that there was no evidence that the policy would be temporary, as it had come about as a direct result of the financial situation of the Treasury which was not expected to be a permanent issue. n
Heskett v Secretary of State for Justice The Court of Appeal (CoA) has held that indirect age discrimination can potentially be justified on the basis of saving costs to balance company books. Previously, a number of cases have addressed whether a discriminatory policy can be justified on the basis of saving costs. Generally, such a reason is not held to be legitimate; however, the EAT held in the case Cross and others v British Airways plc that whilst cost saving cannot on its own amount to a legitimate aim, it may be taken into account alongside other factors. This is known as the ‘cost-plus’ rule. In this case, the employee had worked in the public sector for some time as a probation officer. Due to pay rise limitations implemented by the Treasury in 2010, the organisation he worked for introduced a new pay progression policy. Whilst in the past probation officers could progress three points up the pay scale per year, the new policy meant that they could only progress one pay point per year. From the employee’s perspective, this meant that it would take him 23 years to progress to the top of his pay band. Meanwhile, colleagues who had already attained this, or were nearer to the top than he was, started to earn significantly more than those below them. As individuals in this position tended to be over the age of fifty, the employee claimed indirect age discrimination, arguing that employees under age fifty, in his position,
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| Professional in Payroll, Pensions and Reward |
Issue 67 | February 2021
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