Veitch Penny LLP - Exeter | Crediton, Devon

Case

Woodcock –v- Cumbria Primary Care Trust (“Cumbria PCT”)
Employment Appeal Tribunal – 30 June 2010

Issues

(1) Age discrimination
(2) Redundancy
(3) Justification

Facts

Mr Woodcock was Chief Executive of the North Cumbria Primary Care Trust. His Trust merged with Cumbria PCT. He was placed at risk of redundancy and the redundancy consultation process commenced. However, the Trust took the decision to cut short the consultation process and gave him notice of dismissal so that his employment ended before his 50th birthday.

The Trust argued that it took this step to protect the Trust’s position and save taxpayers’ money. If the Trust had allowed the process to run past his 50th birthday then Mr Woodcock would have been entitled to receive an enhanced payment and additional cost to the Trust of between £500,000 and £1,000,000.

Mr Woodcock brought a claim of direct age discrimination. He argued it was wrong to try and justify direct discrimination on the basis of cost alone. He relied on the case of Cross and others –v- British Airways Plc [2005], where it was held that employers could not justify a discriminatory provision criterion or practice (“PCP”) on costs grounds alone.

At the Tribunal, age discrimination was found to have occurred in the Trust’s timing of the giving of notice of dismissal (in order to prevent Mr Woodcock reaching pensionable age), but the Trust was able to go on to establish that this act was justified as a proportionate means of achieving a legitimate aim. The Tribunal took into account the cost savings, but also the impossibility that completion of the consultation would have made any difference to the outcome.

Mr Woodcock appealed.

Decision

His appeal was unsuccessful. On the evidence, the Employment Tribunal (“EAT”) took into account that his post was genuinely redundant and numerous attempts had been made to find him alternative employment and the outcome of the consultation would not have changed. This windfall was something the Trust could legitimately seek to prevent.

Comments

This case, although the comments of the Judge were obiter, shows an interesting shift in approach from the EAT and case law in this area. The Cross case states that costs as a factor alone could never constitute justification of acts of discrimination and this remains good law until it is overturned. However, the comments of the president in the EAT in this case are persuasive for future cases. Costs alone could constitute justification if the cost alone was disproportionately high. The EAT noted it could be an artificial exercise trying to find additional factors.

This is an interesting development for employers in this climate although the high level of cost involved is very likely to limit the application of this judgment to other cases. It is also fair to say that the particular facts of the case were relevant to the outcome in respect of the extent of the consultation and the steps taken to find alternative employment.