Failure to redeploy can be age discrimination
On September 10th 2009, the Employment Appeal Tribunal (“EAT”) handed down judgement in the case of London Borough of Tower Hamlets V Wooster [2009]. Mr Wooster started employment with Tower Hamlets in 1973 and was placed on secondment to social landlord East End Homes (“EEH”) in 2003. On 9th October 2006, Mr Wooster was notified by Tower Hamlets that his employment would be coming to an end by reason of redundancy, unless a suitable alternative position could be found for him at the council. At the same time, he was encouraged to apply for an advantageous voluntary redundancy package.
The council did not find another permanent role for Mr Wooster and they terminated his employment on 29 December 2006. However, EEH still had work for Mr Wooster and offered to the council to keep him on full salary until July 2007 which would have taken Mr Wooster past his 50th birthday. If Mr Wooster had passed his 50th birthday in the council’s employment he would have been entitled to early retirement under the Local Government pension scheme, but the council declined EEH’s offer stating in an email to their CEO that “if you are going to pay his salary then you can pay his bloody pension when he is 50. If he goes now we do save the pension”. Mr Wooster then took voluntary redundancy.
On March 2007, Mr Wooster commenced proceedings against the council and claimed both unfair dismissal and unlawful (direct) age discrimination under the Employment Equality (Age) Regulations 2006. At first instance, the Employment Tribunal found that although the initial redundancy situation had arisen in good faith, it was Mr Wooster’s age that was the reason for dismissal, rather than extending his secondment or redeploying him elsewhere. He was therefore treated less favourably than a younger hypothetical colleague. The council did not try to justify their actions, so the Employment Tribunal found that Mr Wooster had suffered direct discrimination on grounds of age. His claim for unfair dismissal was also upheld by the Tribunal. The appeal reached the EAT in June 2009.
The EAT upheld the Tribunal’s decision and dismissed the council’s appeal. The council submitted on appeal that they could not accept EEH’s offer to keep Mr Wooster simply so that he could reach the retirement age and take early retirement. However, the EAT found that the Tribunal at first instance had not based its decision on the council’s refusal to extend Mr Wooster’s secondment to EEH, it had simply found that the decision by Tower Hamlets to decline EEH’s offer of further work was evidence of motivation to end Mr Wooster’s employment before he was 50.
This case is a warning to employers who are considering dismissing an employee so as to avoid pension entitlements or other age-related benefits. However, because the council did not attempt a defence of justification, the claim did not decide whether dismissing an employee in order to minimise pension liabilities could be justified as a proportionate means of achieving a legitimate aim.