All bets are off when it comes to age discrimination?

28 November 2013

With the John McCririck age discrimination case hitting the headlines, our experts look at this case, and other age discrimination developments this year:

  • It's not your age, it's just your personality
  • Different redundancy entitlements based on age
  • Failure to hire due to lack of insurance cover was unlawful age discrimination
  • Different treatment under Permanent Health Insurance Scheme was direct and indirect age discrimination
  • CJEU case finds that age-related pension contributions are potentially lawful

It's not your age, it's just your personality

The loss of race commentator John McCririck's age discrimination case against Channel 4 Television Corporation has received widespread media coverage this week - probably not the result those betting in McCririck's favour were hoping for.

But aside from the media hype that has surrounded a judgment involving one of the race industry's most colourful and controversial characters, does this judgment tell us anything new in terms of age discrimination?

The facts of Mr McCririck's case were relatively simple. After it won the exclusive UK terrestrial rights to broadcast horse-racing, Channel 4 invited tenders from various production companies for the work. In inviting companies to tender, Channel 4 made it clear that in terms of its horse-racing coverage this was "the beginning of a new era", encouraging those tendering to "find a way to bring racing to new audiences".

IMG Media, the company which was ultimately successful in its bid, put forward a "dream team" that did not include Mr McCririck. After various meetings to discuss the presenting team, and analysis of audience surveys in relation to presenters (in which Mr McCririck scored badly overall), the racing stalwart had his contract terminated. He brought a claim of age discrimination against Channel 4, and various individuals involved in the decision making (most of the claims against individuals were dropped prior to the hearing).

Although Mr McCririck appeared to give the tribunal enough evidence from which the tribunal could draw an inference of age discrimination, they held that Channel 4 had demonstrated that dismissing Mr McCririck was a proportionate means of achieving the legitimate aim of attracting a wider audience to horse racing.

Miriam O'Reilly successfully passed the finish line in the age discrimination claim which she brought against the BBC as a result of them removing her as a presenter of Countryfile. So why did Mr McCririck fall at the fence?

It is clear from the evidence given at the tribunal that the decision to remove him as a presenter stemmed from a concern that his "on-screen persona" alienated viewers and potential viewers, not his age. Channel 4 could point to audience data which substantiated those concerns.

In Miriam O'Reilly's case, by contrast, while the BBC had established that appealing to a primetime audience (including younger viewers) was a legitimate aim, the tribunal did not accept that choosing younger presenters was necessary or proportionate to achieving that aim.

Essentially this case doesn't develop anything particularly "new" in terms of the law on age discrimination. But it acts as a useful reminder to employers seeking to rely on objective justification that having a legitimate aim (whatever that aim might be), is simply not enough: the employer will also need to show that the way they try and achieve that aim is proportionate, which is perhaps a higher fence to jump over.

So on now to some age-discrimination cases from this year that, while involving less well-known protagonists, are of potentially more importance in terms of what they add to the shifting landscape of case law in this area.

Different redundancy entitlements based on age

The Court of Appeal confirmed in Lockwood v Department of Work and Pensions that differences in severance payments on voluntary redundancy in the Civil Service between older and younger workers could be objectively justified and was not unlawful age discrimination.

The Court of Appeal found that the enhanced payment to older workers in this scenario was a legitimate way of providing a financial cushion for older workers and recognised the problems that they would experience when they lost their jobs. This is potentially good news for older workers, and for employers who seek to provide age-related voluntary redundancy packages.

However, as with all age cases, each case is likely to be fact-specific and require evidence that the means chosen by the employer to achieve their aims were proportionate in the particular circumstances.

A European decision, Dansk Jurist- og Okonomforbund v Indenrigs- og Sundhedsministeriet also showed that when it comes to redundancy entitlements, there can be a number of nuances in terms of what is given to older workers.

In that case the employee, made redundant in Denmark, was denied "availability pay" (intended for civil servants dismissed on the grounds of redundancy, which meant they had to remain 'available for posting') on the basis that he was 65 at the time of redundancy and entitled to a civil service pension.

The Court of the Justice of the European Union (CJEU) held this was age discriminatory, did not fall within a particular exemption, and was not capable of being objectively justified. The legitimate aim of protecting and ensuring the availability of civil servants and their protection in the event of redundancy, while limiting entitlement to availability pay only to civil servants who require protection and who comply with their obligation to remain available, was accepted. However, the CJEU held that the law went above and beyond what was necessary for achieving that aim.

The Danish law did not make any distinction between those who were entitled to take a pension at age 65, but might want to actually continue working, and those who actually started to take their pension at that age, and were not really 'available' for re-posting.

Failure to hire due to lack of insurance cover was unlawful age discrimination

In the case of Foreman v Oasis Taxis Mansfield Limited, taxi drivers earlier this year were successful in an age discrimination claim brought against a future employer after being told they couldn't be hired as drivers because the employer's insurance provider would not cover them because of their age. The drivers in question were over the age of 69 and would not therefore qualify as "approved drivers" under the terms of the insurer's policy.

The tribunal held that this was indirect age discrimination, as the requirement for obtaining insurance put the individuals at a particular disadvantage - the insurance company would not provide cover, and so the employer in question here would not recruit the individuals as drivers.

The future employer failed to show that it had objectively justified this treatment. The tribunal held that only employing a driver in respect of whom its present insurer would provide cover for was not a proportionate way of ensuring that all drivers had insurance cover.

The tribunal would have probably been more sympathetic had the employer made efforts to seek alternative cover for the individuals - employers who find themselves in a similar situation would be well advised to "shop around" in the insurance market to determine whether alternative cover can be found when their own provider is refusing cover because of an individual's age.

Different treatment under Permanent Health Insurance Scheme was direct and indirect age discrimination

Providing insured benefits for older workers will continue to cause challenges for employers, particularly now that the default retirement age has gone. With workers wanting to stay in employment longer and insurers continuing to place restrictions on the terms under which they will provide benefits, employers can at times find themselves between a rock and a hard place.

The case of Witham v Capita Insurance Services Limited brought out some of these issues in the context of private health insurance (PHI).

Mr Witham received PHI benefits under an arrangement between his employer, Capita Insurance Services Limited and an insurance provider. The payments under this scheme stopped when he turned 55. Mr Witham brought direct and indirect age discrimination claims because of this.

He had also been denied the opportunity to join the Capita PHI scheme arranged by his employer in 2002, which would have entitled him to receive PHI until 65. This was because the insurance company were not prepared to cover people who were not "actively at work".

Mr Witham claimed this was an indirectly discriminatory practice which put him, and others in the age group 45 plus, at a disadvantage compared with the under 45s. Mr Witham was successful in his claims.

This case will be of interest to those who provide insured benefits to employees which cease at a particular age. Interestingly, a statutory exemption was introduced into the Equality Act to cover insured benefits for those over the greater of State Pension Age and 65. Although this won't always provide employers with the comfort they are after when they restrict benefits on the basis of age, it may be of assistance where the cut-off point is then. The exemption is unlikely to help employers who self-insure the benefits though.

CJEU case finds that age-related pension contributions are potentially lawful

Finally, when it comes to the provision of age-related benefits, employers should not forget to take a look at the pension schemes they provide for employees. There are a number of important statutory exemptions which permit age-related practices in relation to occupational and personal pension schemes.

That makes total sense, as age is inherent to the way that pension schemes are introduced and administered - indeed, without age as its 'anchor', the very concept of pensions (an "old-age benefit") would fall away. However, this does not mean employers can simply turn a blind eye to age-related practices in its pension schemes. Employers still need to ask whether such practices either fall within a specific statutory exemption, or are capable of being objectively justified.

The CJEU gave guidance in the HK Danmark v Experian A/S decision, which involved age-related contributions to an occupational pension scheme. In this case, the employee and employer contributions increased in accordance with the employee's age.

The CJEU found that age-related pension contributions did not fall within a specific exemption provided by European law, but the practice was still capable of being objectively justified.

In the particular case in question, the potentially legitimate aims of the employer that were identified included the need for higher contributions from older workers to acknowledge the higher risk of death and incapacity, and also the aim of encouraging younger workers to join a pension scheme early on, while still leaving them a significant amount of disposable income.

Though these were identified as potentially legitimate aims, the CJEU left it to the domestic court to determine whether or not those were, in fact, the aims of the employer, and also whether or not the means of achieving those aims were proportionate.

The decision will be welcomed by employers and Trustees of pension schemes who provide staggered increasing contribution rates. However, it also serves as a reminder that pension practices, like any other form of benefit provision, remain vulnerable to claims of discrimination where different treatment is given on the basis of age.

Conclusion

Many of the most interesting cases this year have highlighted the need for employers to tread carefully in the provision or curtailment of benefits on the basis of age.

What all of the cases show is that no "one size fits all" approach where age discrimination is concerned. Employers need to think carefully about the reasons behind any different treatment they afford employees because of their age.


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