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Age Discrimination – Coming of Age?1

Synopsis

For many years, there has been concern that age discrimination is taken

much less seriously by UK law than say, sex discrimination. This paper

argues that after a slow start developments, including (perhaps

surprisingly) the Seldon litigation, indicate that the UK legal system is

now taking age discrimination much more seriously. As always, the CJEU

has had a part to play.

1. The members of the discrimination law family – now known collectively as

the protected characteristics – were warned that a new member was on the

way when the EU agreed the Council Directive in 2000/78/EC establishing a

general framework for equal treatment in employment and occupation. Its

early years were however troubled.

2. The heart of the matter was a certain ambivalence about whether age

(discrimination) does matter as much as the government’s early

consultation papers suggested2. On a domestic level, the point was made by

Lord Walker in R (Carson and Reynolds) v Secretary of State for Work and

Pensions [2006] 1 AC 173 at [60] when he said

Age is a personal characteristic, but it is different in kind from other

personal characteristics. Every human being starts life as a tiny infant,

and none of us can do anything to stop the passage of the years. As

the High Court of Australia said (in a different context) in Stingel v The

1 Equality and Diversity – Coming of Age” was the title of the March 2006 Report on the Government Consultation the draft Age Discrimination Regulations. 2 Toward Equality and Diversity – Age Matters (June 2003).

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Queen (1990) 171 CLR 312, 330: "the process of development from

childhood to maturity is something which, being common to us all, is

an aspect of ordinariness."

There is nothing intrinsically demeaning about age. It may be

disheartening for a man to be told that he cannot continue in his

chosen job after 50, and it is certainly demeaning for a woman air

hostess to be told that she cannot continue as cabin crew after the age

of 40 (see Defrenne v Société Anonyme Belge de Navigation Aérienne

(Case 43/75) [1976] ECR 455). But Mlle Defrenne was discriminated

against on the ground of sex, not age. In relation to normal retirement

ages lines have to be drawn somewhere…

3. On a European level, there was also ambivalence. Article 21 of the

European Charter on Fundamental Rights and Freedoms proclaims a

fundamental right not to be discriminated against on the ground of age. So

does much of the case law: Mangold v. Helm [2006] IRLR 143. On the other

hand in a much cited opinion Advocate General Sharpston indicated in the

case of Bartsch v. Bosch and Siemans [2008] ECR 1- 7245 that age was

qualitatively different from race etc. on the grounds of its “greater

specificity” - whatever that means.

4. European ambivalence was later to express itself in the astonishing

proposition that “dignity” is a legitimate aim justifying compulsory

retirement. This means that compulsory retirement can justified by

reference to the discomfort of younger colleagues in confronting the retiree

about his performance; this remains so even if the retiree is willing to

submit to a performance management regime through which she says she

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will prove her worth3. This is a staggering proposition in a rights/autonomy

based body of law.

5. Between 2000 and 2006, the UK endured a policy debate about whether

age discrimination should apply to compulsory retirement. The judgment

of Blake J in the judicial review proceedings brought by Age Concern is

instructive4. The research evidence indicated that there was no evidence of

declining performance until age 70 and Blake J was not able to find any

evidence of job blocking such as to justify mandatory retirement at 65. Yet

the government still passed Regulation 30 exempting retirement at 65 from

the age discrimination regulations provided only that employers considered

(but without giving any reasons for rejecting) a request to say on.

6. In the same vein, the government took advantage to the maximum possible

extent of the liberty given to it by the framework directive to delay

implementation. Thus the legislation did not come into force until October

2006, the Home Office Minister at the time stating that the Regulations

were brought into force “with the greatest possible reluctance”.

Seldon: Judicial Caution

7. Unsurprisingly therefore, the Seldon litigation had some worrying

implications for the future of age discrimination law.

8. One was the attitude of the various Courts to consent: all of the Courts

which have heard the case thus far have held against Mr Seldon the fact

that he signed the (renewed) partnership deed in 2005. But why so? Article

16 of the framework directive provides that discriminatory agreements

shall not be enforceable. If an aspiring female partner in a law firm were to

3 Rosenbladt v Oellerking Gebaudereinigungsges mbH, C-45/09 [2012] All ER (EC) 288 ECJ

4 R (Age UK) v. Secretary of State for Business Industry and Skills [2010] ICR 260.

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sign a partnership deed (the only one on offer) which required her to work

full time, no one would consider that matter capable of undermining her

claim for indirect sex discrimination following the refusal of her request to

work part-time.

9. Another was the low evidential standard which was imposed. Thus in its

2007 decision the ET had to consider whether compulsory retirement was

justified by

a) the need to avoid confronting older partners with the uncomfortable

truth (“collegiality”)

b) the need to plan the workforce

c) the need to retain associates.

[the Claimant dubbed the last two of these three aims “Dead Men’s Shoes”]

10. One of the Claimant’s submissions was that there was no evidence that any

of these aims required compulsory retirement; no evidence for example

that performance management would not deal with issues threatening

collegiality; no evidence that “dead men’s shoes” was the way careers

advanced in modern law firms.

11. This submission failed at every stage. The EAT was particularly clear that an

ET did not need “concrete evidence”. In Homer, Elias P repeated the same

point when he said

It is an error to think that concrete evidence is always necessary to

establish justification, and the ACAS guidance should not be read in

that way. Justification may be established in an appropriate case by

reasoned and rational judgment. What is impermissible is a

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justification based simply on subjective impression or stereotyped

assumptions5

12. It was enough if partners stepped up and justified the practice on the basis

of “their experience” - without necessarily giving specific examples.

13. More grandly, the Appellant in Seldon had one enormous point to make.

This was that Article 6(1) of the Directive did not permit the delegation by

the State to private employers of decisions about whether social policy

required either a) workers to retire so as to allow space for youth; or

alternatively b) to stay at work in order to support themselves. A related

point was that any justificatory aim had to be one of social policy. A private

business aim would not do. These arguments were rejected. Businesses

were to have broad discretion to pursue their own aims provided only they

were loosely related to the State’s social policy aims. However as we shall

see, the breadth of the permitted aims has had a very significant impact

upon the proportionality test.

The Turn of the Tide?

14. The starting point is obvious. In 2011, the government repealed the

sections of the Equality Act containing the Designated Retirement Age. For

some reason, previous concern about job blocking had proved unfounded

and it was no longer necessary to maintain a mandatory retirement age.

15. Looking now at Seldon, Lady Hale’s approach to proportionality is crucial. In

the only paragraph of her judgment to discuss proportionality, she said

5 Chief Constable of South Yorkshire v Homer [2009] IRLR 262 at para 48.

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…the means chosen have to be both appropriate and necessary. It is one

thing to say that the aim is to achieve a balanced and diverse workforce.

It is another thing to say that a mandatory retirement age of 65 is both

appropriate and necessary to achieving this end. It is one thing to say that

the aim is to avoid the need for performance management procedures. It

is another to say that a mandatory retirement age of 65 is appropriate

and necessary to achieving this end. The means have to be carefully

scrutinised in the context of the particular business concerned in order to

see whether they do in fact meet the objective and there are not other

less discriminatory measures which would do so (paragraph 62).

16. That it was put this way is not an accident. During Mr Seldon’s first appeal

to the EAT, Declan O’Dempsey for the EHRC (Intervening) invited the EAT

to develop an approach emanating from the decision of Elias P in Redcar v

Cleveland BC where he said

It is inherent in the proportionality principle that where different means

of achieving a particular objective could be achieved, the one which has

the least discriminatory impact should be chosen. For a recent example

see the decision of the Court of Appeal in R (Elias) v Secretary of State for

Defence [2006] 1 WLR 3213. (emphasis added)

17. Not surprisingly, when hearing Mr Seldon’s appeal, Elias P endorsed his own

views on Redcar:

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We agree that the rule should adapt the least discriminatory means of

achieving the particular objective.6 (para 62).

18. In the Court of Appeal and the Supreme Court, where the Appellant was

funded by the EHRC, this approach was commended to both Courts. Thus in

the Appellant’s Case in the Supreme Court it was said

In every case, rigorous consideration of the possibility of less

discriminatory measures has been required and where this has not

occurred then the measure has not been justified: see Ingeniorforeningen

I Danmark and Hennings and Mai (B2 664)

19. It is clear why Lady Hale accepted this submission: she rejected the

Appellant’s case in Seldon that the class of legitimate aims was limited to

state level social policy aims. Employers were to be given flexibility in

choosing what aims to pursue. There was thus a danger that the defence

would become too broad. This however was to be prevented by three

further requirements namely,

a) that the Respondent must actually be pursuing the aim at the

material time;

b) that the aim must be legitimate in the circumstances of the

particular business;

and

c) that the means chosen be both appropriate and necessary.

6 [2009] ICR 60 at para 62.

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20. Moreover, one of the issues in the Supreme Court was the question of

whether Regulation 3 required the justification of Clause 22 of the

Partnership Deed (as the Respondent said) or its application to the

Appellant in his particular circumstances (as the Appellant contended).

Again the Respondent’s case was accepted.

21. However it follows from this that where a Respondent relies on a rule the

consideration of proportionality will inevitably come down to the

consideration of alternative rules. Since the Respondent bears the burden

of proof it will have to show that any alternatives suggested by the Claimant

are not apt to achieve the aim. The position is similar to that facing a

Respondent in a DDA claim which has to show that any reasonable

adjustments proposed by the Claimant are unreasonable: see Project

Management Institute v Latif [2007] IRLR 579.

22. This is clearly in line with EU Law. The CJEU considers that a measure is

disproportionate if there are alternative measures which achieve the same

aim. Moreover notwithstanding the margin of appreciation accorded to

Members States, the CJEU is rigorous and proactive in considering

alternative less discriminatory rules.

23. There are numerous cases which illustrate the point, but it is perhaps best

illustrated by Hennings and Mai [2012] IRLR 83.7

24. The Claimants in that case were appointed at an initial salary determined by

their age on appointment. The question for the CJEU was whether the

discriminatory effects of this rule could be justified. The Danish government

said that the measure was justified because older workers tended to be

more experienced.

7 See also Ingeniørforeningen I Danmark (acting on behalf of Andersen) v Region Syddanmark, C-499/08 [2012] All ER (EC) 342 ECJ

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25. The CJEU said the measure was disproportionate because a rule based on

experience would be equally if not more effective and would be less

discriminatory: see paras 69-78 of the judgment.

26. In my view, this represents a real change. Previously, the justification test

has been clothed in the language of reasonable necessity following the

decision of the Court of Appeal in Hardys and Hanson v Lex [2005] ICR 1565.

In Benson v. Land Registry [2012] ICR 627 Underhill J. spoke of

27. …the error of treating the language of “real need”, or “reasonable

needs”, as Balcombe LJ put it in Hampson, as connoting a requirement of

absolute necessity. It is well established that that is not the case: see the

judgments of the Court of Appeal in Barry ([1999] ICR 319, at p. 336 A-B)

and in Cadman v Health and Safety Executive [2005] ICR 1546, and of Elias

P in this Tribunal in Blackburn (above), at paras. 17-21 (pp. 509-510). In

Cadman Maurice Kay LJ said, at para. 31 (p. 1560 B-C):

The test does not require the employer to establish that the

measure complained of was "necessary" in the sense of being

the only course open to him. That is plain from Barry. … The

difference between "necessary" and "reasonably necessary" is a

significant one …”

28. Thus the decision in Seldon marks a clear shift from this position which is

wholly in line with the trend in EU case law and which makes the

proportionality test emanating from Luxemburg much stricter than that

which applies when Human Rights issues are at stake.8

8 See “Is Proportionality Differently Applied by Luxembourg and Strasbourg?” Unpublished paper by Richard Wilson QC 3rd November 2013.

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29. Moreover its impact is all the greater because of Lady Hale’s repeated

emphasis on the need to show that the rule was justified in circumstances

of the Respondent’s particular business. Generalisations will not be

enough.

Lockwood and Comparators

30. If the approach in Seldon to proportionality amounts to a turning of the

tide, the tide became higher in the case of Lockwood v DWP [2013] IRLR 941

31. The case concerned the Civil Service Compensation Scheme which paid

compensation to those taking redundancy. The level of compensation was

determined by a number of age related bands based on evidence collected

by the Respondent about the differing responsibilities and needs of its

employees at different age defined stages of their lives.

32. At first instance, the Claimants failed because it was found that the relevant

older employees were not statutory comparators because their

circumstances were different.

33. This (be it noted) was a version of Lord Walker’s argument in Carson: we all

progress through the ages. It was important because if accepted it would

have had the effect of exempting many age related practices from scrutiny

under the proportionality test.

34. However the Court of Appeal rejected this approach. An alleged

comparator could not be distinguished by reference to age related

characteristics.

35. The Claimants failed on proportionality: while different banding rules could

have been adopted that did not make the one chosen disproportionate.

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Surprisingly, the point about alternative rules arising from Seldon does not

appear to have been taken.

36. However it is noteworthy that the Respondent seems to have come armed

with very detailed empirical evidence to back up its claims [see paragraph

15]. This I would suggest represents the way in which the proportionality

test is being replied in a more rigorous way.

Proportionality Post Seldon: the A19 Cases

37. Further evidence of a more rigorous approach to proportionality can be

found in the decision of the London Central ET in the A19 cases.

38. Police Officers have considerable security of tenure but may be required to

retire at 60 or 65 depending on rank under Regulation A 18 of the Police

Pensions Regulations. In addition, Regulation A 19 provides

Compulsory retirement on grounds of efficiency of the force

A19. (1) This Regulation shall apply to a regular policeman, other

than a chief officer of police, deputy chief constable or assistant

chief constable, who if required to retire would be entitled to

receive a pension of an amount not less than 2 thirds of his average

pensionable pay or would be entitled to receive a pension of such

an amount if it did not fall to be reduced in accordance with Part VIII

of Schedule B (reduction of pension related to up-rating of widow’s

pension).

(2) If a police authority determines that the retention in the force of

a regular policeman to whom this Regulation applies would not be

in the general interests of efficiency, he may be required to retire

on such date as the police authority determine.

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39. Regulation 19 had traditionally been used to “accommodate” under-

performing individuals but between 2010 and 2012 it was used to effect the

retirement of all officers then entitled to a 2/3 pension. A 2/3 pension could

be earned only by 30 years’ service. Accordingly these offices were for the

most part about 55 years of age and the provision was prima facie indirectly

discriminatory within the terms of S. 19 of the Equality Act.

40. The question considered by the Central London Employment Tribunal was

whether such effects could be justified. At about the same time the High

Court considered whether the use of A.19 was lawful as a matter of public

law and held that it was.9

41. The Claimants contended that the sole aim of the application of this

measure was to save cost. The defence failed, they said, because cost

saving is not per se a legitimate aim: O’Brien v Ministry of Justice [2013] ICR

499 at para 69.

42. Like many previously, the ET sidestepped an argument which is well

founded in authority but perhaps short of common sense. It held that the

legitimate aim was increasing the efficiency of the force which was not

necessarily the same thing as saving costs. As such the aim was legitimate.

43. However though the Respondents succeeded in establishing a legitimate

aim, the ET went on to hold that the blanket application of the rule was

neither appropriate nor necessary. Accordingly it was disproportionate.

44. The starting point was that the Respondents having received Counsel’s

advice that the intended use of A19 was potentially justified had failed to

properly consider whether it was in fact appropriate and necessary and if

so why. In the language of Seldon, they had failed to consider whether the

circumstances of these particular business required retirement.

9 See [2023] EWHC 2173 (Admin)

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45. In particular, it had assumed that applying A19 would result in a saving of

the salaries of all who were subject to it whereas the ET found that in

reality, most of those concerned would have retired anyway.

46. If followed that the Respondents task before the Tribunal was a difficult one

because they had not addressed their own business needs in advance: R

(Elias) v Secretary of State [2006] 1 WLR 3213.

47. In addition, the Respondents had failed to consider a number of possible

alternatives. In particular, the Respondents could have sought to plan their

workforce in more detail e.g. by asking all those eligible to retire on 2/3

pension whether they intended to stay on before ascertaining how many

compulsory retirements were necessary (see para 83). Part-time working

and career breaks were also alternatives. Thus though Seldon was not cited.

EJ Taylor was clearly applying the “was there any alternative” approach.

48. The case is also striking in that even the availability of a substantial pension

to a retiring officer did not prevent retirement being a disproportionate

measure.

Retirement and Pensions

49. The view that the availability of pension could very much help to justify

retirement had some support in the case-law.

50. However the CJEU has also now taken a very different approach. The case

of Dansk [2014] IRLR 37 shows that the availability of a pension does not in

itself show that it is appropriate and necessary to retire if the employee

wishes to go on working to improve his/her pension position: see paras 67

and 68.

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51. In that case, a measure depriving Danish Civil Servants of availability

allowances upon redundancy merely because they were 65 was held

disproportionate because

the legitimate objectives pursued by the legislation at issue in the

main proceedings may be attained by less restrictive but equally

appropriate measures (para 69).

52. The purpose of the rule was to assist civil servants who had made

redundant to remain available for work within the Civil Service. This could

have been achieved by withdrawing the allowance from anyone in receipt

of their pension. A rule which withdrew the allowance from anyone able to

withdraw their pension was overbroad.

53. This was so despite the pensions available to the Claimants since it was

perfectly legitimate for them to go on working in order to obtain promotion

and also to improve their pension position.

Discrimination and Cost

54. In recent years, the UK Courts have shown themselves less than totally

committed to the principle that discrimination cannot be justified alone by

costs considerations alone. This is sometimes known as the cost plus

approach and stems from the judgment of Burton P in Cross v British

Airways [2005] IRLR 423.

55. In Woodcock v Cumbria Primary Care Trust [2011] ICR 143, the Employment

Appeal Tribunal refused to follow it on the basis that it was liable to spawn

an excessively unrealistic approach to the presentation of arguments.

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56. On appeal, the Court of Appeal loyally upheld a long line of cases in the

CJEU to the effect that cost alone cannot justify discrimination. Arguably

however its loyalty was somewhat superficial. In that case the timing of the

Claimant’s dismissal was determined by the fact that had he been allowed

to stay till he was 49, his severance benefits would have been significantly

greater.

57. The Court of Appeal held that while this was age based less favourable

treatment it was a proportionate means of achieving a legitimate aim since

it was not solely cost based. The aim was to effect a dismissal in the most

economic way possible.

58. In O’Brien v Ministry of Justice [2013] IRLR 315 the Supreme Court (Lord

Hope and Lady Hale) strongly affirmed the EU Jurisprudence. Considering

as a justification, it said

69. Hence the European cases clearly establish that a Member State

may decide for itself how much it will spend upon its benefits system,

or presumably upon its justice system, or indeed upon any other area

of social policy. But within that system, the choices it makes must be

consistent with the principles of equal treatment and non-

discrimination. A discriminatory rule or practice can only be justified

by reference to a legitimate aim other than the simple saving of cost.

……..

74. In effect, the arguments presented to us are the same as the

arguments presented by the Kingdom of the Netherlands in

Commission v The Netherlands (C-542/09) [2012] 3 CMLR 643: that if

recorders get a pension, then the pensions payable to circuit judges

will have to be reduced. That is a pure budgetary consideration. It

depends upon the assumption that the present sums available for

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judicial pensions are fixed for all time. Of course there is not a

bottomless fund of public money available. Of course we are currently

living in very difficult times. But the fundamental principles of equal

treatment cannot depend upon how much money happens to be

available in the public coffers at any one particular time or upon how

the State chooses to allocate the funds available between the various

responsibilities it undertakes. That argument would not avail a private

employer and it should not avail the State in its capacity as an

employer. Even supposing that direct sex discrimination were

justifiable, it would not be legitimate to pay women judges less than

men judges on the basis that this would cost less, that more money

would then be available to attract the best male candidates, or even

on the basis that most women need less than most men.

59. Moreover they expressed doubts (para 70) about the conclusion of the

Court of Appeal in Woodcock.

60. It seems likely also that the conclusion of Underhill J in Benson v. Land

Registry [2012] ICR 627 was incorrect. There the Respondent’s aim was to

maximize headcount reduction within a fixed budget of £12 million. This

inevitably led to the selection of younger as against older people because

under the scheme older workers received expensive top ups to their

pensions.

61. It was held that given the employer’s legitimate aim, selection according to

age inevitably followed as proportionate and necessary. The ET had erred in

in effect requiring the employer to increase the size of its budget.

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62. Thus in Benson the cost argument was circumvented by subsuming a cost

limitation into the statement of the aim. But this would now seem

impermissible in the light of Lady Hale’s comments in O’Brien.

63. This is an important matter for employers who will often have fixed budgets

for redundancy/restructuring exercises. In reality, age may be relevant to

“removal cost” but the message from recent case law is that is unlikely to

be a permitted criterion of choice.

Choosing a Retirement: 65 or 68

64. One question which remains unresolved is how the proportionality test

applies to the choice between potential retirement ages. When Mr Seldon’s

case was remitted back to the ET, his argument was that the partnership’s

aims of workforce planning and associate retention could just as easily be

achieved by a retirement age of 68.

65. Giving the judgment of the Court of Appeal in Seldon, Sir Mark Waller

appeared to indicate that at least as far as work force planning and

associate retention were concerned any age would do. He said

39.There is a distinction between a cut-off date in relation to the

"dead men's shoes" aims, and the "collegiality aim". Under

performance as a result of age is not relevant to 65 being chosen as

a cut-off to encourage recruitment or long term planning. That

being so it seems to me that the mere fact that the firm might have

chosen some other age in relation to those aims cannot

automatically lead to the conclusion that the rule which provides

for retirement at 65 is not justified. A rule which adopts 66 is less

discriminatory to partners aged 65, but is now more discriminatory

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to partners aged 66. The selection of any age is going to be more

discriminatory to that age. If that makes the rule unlawful, it would

simply be impossible to justify a retirement age introduced with

those aims. The directive (recital 14) seems to contemplate the

legitimacy of a retirement age and it cannot thus have envisaged

that it would be impossible to justify one age because a different

age would be less discriminatory to persons of the age chosen.

40. The question is whether the clause introduced with the legitimate

aims is a proportionate means of achieving those aims. If it is

proportionate to choose 65, the fact it would be less discriminatory

to some to have chosen 66 cannot in my view render the clause

unlawful. It is true there was no evidence as to whether it would

have made any difference to associates or others whether the age

chosen had been 68, 65 or 63. But in my view the fact the firm

might have justified anyone of those ages does not mean that it is

unable to choose one at all.10

66. The argument is flawed. It is true that at any given age raising the

retirement age by one year will always involve less discrimination. But it

does not follow that if the retirement age has to be justified compulsory

retirement cannot be justified at all.

67. At any given age, raising the retirement age by one year will always involve

less discrimination. But it not true that raising the retirement age by one

year will always be costless.

10 [2011] ICR 60

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68. There will come a point at which raising the retirement age any further will

hinder the achievement of the partnerships aims. In the case of a law firm

like this there would inevitably come a point in this case where the further

raising of the age would undermine the firm’s collegiality aim.11

69. Unsurprisingly, therefore Lady Hale did not accept this view when

discussing the scope of the remission. She said

There is a difference between justifying a retirement age and justifying

this retirement age (para 68).

70. If there was any doubt that the proportionality of a compulsory retirement

rule must include consideration of the age at which it operates, this was laid

to rest by the decision of the CJEU in Commission v Hungary Case (C-

286/12) In that case, the CJEU held the a rule providing for the compulsory

retirement of judges was disproportionate because it was at age 62.

Previously it had been at 68. See paras 65-79 of the judgment but especially

par 71.

71. Mr Seldon’s second trip to the EAT arose because the ET refused to accept

that given Lady Hale’s tightening up of the proportionality test, the

Respondent was obliged to retire at the highest possible age. It said:

Where there is a range of ages that the employer might have chosen,

it does not follow that the age selected cannot be justified…

72. It went on to hold that only retirement between 64 and 66 would achieve

the partnerships legitimate aims.

11 If that were not so, it would show only that age based rules were not appropriate to achieving the aim because all that is needed is certainty as to when vacancies might arise.

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73. In effect this was to apply the band of reasonable responses test held to be

erroneous by the Court of Appeal in Hardy and Hanson’s PLC v Lax [2005]

ICR 1565.

74. Unfortunately the EAT affirmed the ET’s judgment when Seldon (No.2) was

heard on 14th May stating that the Hardys and Hanson test did still apply to

the choice between ages. This is doubly unfortunate because it seems

unlikely that the Court of Appeal will have the opportunity to consider the

case again.

75. In truth, the solution to the problem of what should be the retirement age

is likely to lie in the power of consent. Courts are unlikely to hold

disproportionate a retirement age to which there has been recent informed

consent. It is for this reason that there is much force in the suggestion

made by ACAS that employers should regularly review with employees their

future plans.

Discrimination in the Provision of Services

76. There is another way in which age discrimination was initially the poor

relation. The Equality Act made it unlawful to discriminate in relation to the

provision of goods and service on the basis of a protected characteristic: it

was these provisions in relation to sexual orientation which gave rise to the

famous case of Hall v Bull [2013] 1 WLR 3741. However, the equivalent

provision with respect to age did not come into place with regards to age

until October 201212. And when they did come into force they included

some comprehensive exceptions designed inter alia to protect age based

clubs.

12 Equality Act 2010 (Commencement No. 4, Savings, Consequential, Transitional, Transitory and Incidental

Provisions and Revocation) Order 2010/2317 art 2(3) (a); Equality Act 2010 (Commencement No. 9) Order

2012/1569

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77. The EHRC has recently produced a draft code on discrimination in the

provision of services13. Some the examples cited make it clear how

demanding the law can be on service providers. Thus if the Department of

Health wants to restrict vaccination for a particular disease to those under

50, it will need solid research evidence of a slower and lower response from

the over 50s if it’s less favourable treatment of the over 50s is to be a

proportionate means of achieving a legitimate aim.

78. However, in the light of recent ECJ case law, this paper focuses however on

the provision of services by or for employers (AKA employee benefits).

79. Consider the following scenario:

Bloggs and Co offers its employees private health care and PHI cover

but neither continues beyond the age of 65. Their providers indicate

that they do not consider it to be economic to provide such cover. Are

Bloggs and Co unlawfully discriminating on the grounds of age? Are

their providers doing so?

80. In this respect, Parliament has gone to great lengths to protect both

employers and their service providers.

81. Thus Schedule 9 Part 2(Exceptions Relating to Age)

14.— Insurance etc.

1. It is not an age contravention for an employer to make

arrangements for, or afford access to, the provision of insurance or a

related financial service to or in respect of an employee for a period

ending when the employee attains whichever is the greater of—

a) the age of 65, and

b) the state pensionable age.

13 EHRC (draft) supplement to the Service, Public Functions & Associations (March 2014) para 3.25

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2. It is not an age contravention for an employer to make

arrangements for, or afford access to, the provision of insurance or a

related financial service to or in respect of only such employees as

have not attained whichever is the greater of—

a) the age of 65, and

b) the state pensionable age.

3. Sub-paragraphs (1) and (2) apply only where the insurance or

related financial service is, or is to be, provided to the employer's

employees or a class of those employees—

a) in pursuance of an arrangement between the employer and

another person, or

b) where the employer's business includes the provision of

insurance or financial services of the description in question,

by the employer.

4. The state pensionable age is the pensionable age determined in

accordance with the rules in paragraph 1 of Schedule 4 to the

Pensions Act 1995 2.

82. As regards claims in respect of services, Schedule 3 provides in Part 5 as

follows

20. Services arranged by employer

1. Section 29 does not apply to the provision of a relevant financial

service if the provision is in pursuance of arrangements made by an

employer for the service-provider to provide the service to the

employer's employees, and other persons, as a consequence of the

employment.

23

2. “Relevant financial service” means—

a. insurance or a related financial service, or

b. a service relating to membership of or benefits under a

personal pension scheme (within the meaning given by

section 1 of the Pension Schemes Act 1993).

83) Thus by virtue of working for an employer, the service provider would on

the face of it be exempt from liability. In case the matter was still in doubt,

further protection was provided by when the service provision rules of the

Equality Act were brought into play by the Equality Act 2010 (Age

Exceptions) Order 2012/2466. This inserted a new S.20A into Part 5 of

Schedule 3.

20A.— Age

1. A person (A) does not contravene section 29, so far as relating to age

discrimination, by doing anything in connection with the provision of

a financial service.

2. Where A conducts an assessment of risk for the purposes of

providing the financial service to another person (B), A may rely on

sub-paragraph (1) only if the assessment of risk, so far as it involves a

consideration of B's age, is carried out by reference to information

which is relevant to the assessment of risk and from a source on

which it is reasonable to rely.

3. In this paragraph, “financial service” includes a service of a banking,

credit, insurance, personal pension, investment or payment nature.

24

83. None of this helps an employer who provides age related access to benefits

prior to 65. This point was well illustrated by the decision of the ET in

Witham v Capita Insurance Services (Newcastle Employment Tribunal

February 2013). The Claimant in that case became ill and thus entitled to

PHI Benefits. However under the terms of the policy his benefits ceased

when he became 55.

84. The ET held that this less favourable treatment was not a proportionate

means of achieving a legitimate aim. The reality was simply that once the

benefits ceased to be covered by Unum, the Respondent was unwilling to

meet the cost itself; or explore any other way of doing so. Cost however

could not itself justify discrimination on the grounds of age.

85. However the status of these exceptions has been thrown into doubt by the

decision of the CJEU in the case of HK Danmark v Experian A/S (Case

476/11, 26th September 2013).

86. Ms Kristensen was a member of an occupational pension scheme to which

both she and her employer contributed. However those contributions rates

increased sharply when she reached 35 and again when she reached 45.

87. The first issue for the ECJ was whether these rules were out with the

Framework Directive due to Article 6(2) which provides that

Notwithstanding Article 2(2), Member States may provide that the fixing

for occupational social security schemes of ages for admission or

entitlement to retirement or invalidity benefits, including the fixing under

those schemes of different ages for employees or groups or categories of

employees, and the use, in the context of such schemes, of age criteria in

actuarial calculations, does not constitute discrimination on the grounds

25

of age, provided this does not result in discrimination on the grounds of

sex.

88. The second issue was whether, if they were not, these rules were

nevertheless a proportionate means of achieving a legitimate aim.

89. As to the first issue, the ECJ held that the employer’s contributions were

akin to pay and accordingly not within the exception. The reasoning of the

Court was striking: the CJEU noted that Article 3(1) of the Directive applied

to “pay” to which the exception in Article 6(2) could not apply. Pay however

was given the very broad definition adopted many years previously in equal

pay litigation for example Barber v Guardian Royal Exchange [1990] IRLR

240. The CJEU held that

The concept of pay, within the meaning of Article 157(2) TFEU comprises

any consideration, whether in cash or in kind, whether immediate or

future, provided that the worker receives it, albeit indirectly, in respect of

his employment from his employer (see, in particular, Case C-262/88

Barber [1990] ECR I-1889, paragraph 12). (emphasis added)

89. As to the proportionality question, the matter was essentially remitted back

to the National Court for a decision.

90. However, the significance of the decision is the finding on the first issue. As

a matter of EU Law, failure to provide access to benefits like PHI and Health

Insurance to older workers would seem to be an aged base difference in

pay which falls outside article 6(2).

91. Accordingly a blanket exemption for such services would not seem

permissible as a matter of EU Law – and we know from the decision of that

26

domestic legislation which undermines EU rights has to be disapplied even

in private law litigation14: Benkharbouch v Sudan [2013] IRLR 918.

92. Ironically, the service provider is unaffected by this. Service provision does

not fall within the Framework Directive. The employer however may be

liable for offering the service in an age discriminatory way unless this can be

justified.

Conclusion and Crystal Ball

93. Notwithstanding the fees regime, we may expect the steady flow of clams

based on direct discrimination on the grounds of age to continue. It is

indirect discrimination however which has the greatest potential to cause

waves.

94. Homer v Chief Constable of West Yorkshire Police15 indicates the potential.

Mr Homer had been told that he could not be promoted because he did not

have a law degree. However after a trip the Supreme Court, the ET

accepted that the Respondent had the legitimate aim of recruiting and

retaining a high quality workforce. However it was disproportionate to

apply the requirement to existing employees such as the Claimant.

95. As this case shows assessment criteria can be indirectly discriminatory on

the grounds of age. The point is confirmed by the Meadows report which

was cited to the appellate Courts in Seldon. Whilst employees may not

decline generally until 70, they do tend at different ages to bring different

skills to the party. “Know How” but not speed for example.

96. The challenge for the future is likely to be the development of modes of

assessment which do not indirectly discriminate on the grounds of age.

14 CF Kücükdeveci v Swedex GmbH & Co KG, C-555/07 [2010] IRLR 346 ECJ 15 Homer v Chief Constable of West Yorkshire Police [2012] IRLR 601 SC

27

97. Flexible working for older employees may also be an issue: some older

workers may seek to work part-time on the grounds of a need to care for an

elderly relative16. Others may receive an unfavourable performance review.

In response, they will perhaps stand the parameters of the age debate on

end and ask to go part-time because they are “slowing down”!! though the

statistical basis for group disadvantage - if still required17 - may take time to

emerge.18

98. Challenging times.

Richard O’Dair 36 Bedford Row 15th October 2014

16 If the carer is female then the claim may take form of indirect discrimination on the grounds of gender. 17 See Eweida v UK [2013] IRLR 751 ECHR 18 Mather v Devine UKEAT/0119/12, [2012] EqLR 1082 shows that it is no obstacle to a discrimination claim that no flexible working request could be made in this situation.