Selecting Comparators in Age Discrimination Claim
The Employment Appeal Tribunal ('EAT') has considered the question of comparators in an age discrimination claim including whether the circumstances of younger workers were materially different to those of older workers in a redundancy exercise.
Facts
In Donkor v Royal Bank of Scotland Mr Donkor was employed as a regional director for the Royal Bank of Scotland. As part of a restructuring in 2012 there was a preliminary selection exercise and Mr Donkor was one of four regional directors not selected to interview for new roles. Mr Donkor and one other of the regional directors were aged over 50 and the other two directors were under 50.
The two directors who were under 50 applied for and were offered voluntary redundancy. The directors who were over 50 were denied the opportunity to apply for voluntary redundancy however as a result of the high severance costs associated with their entitlement to early retirement. As a result the bank subsequently gave Mr Donkor the opportunity to apply for an alternative role and he was appointed to that role. Following a further restructuring in 2013, Mr Donkor applied successfully for voluntary redundancy. By this time however the pension scheme rules, which had previously been applicable, had changed meaning that Mr Donkor was no longer eligible to receive early retirement benefits.
Mr Donkor brought a claim in the Employment Tribunal ('ET') claiming direct age discrimination in relation to the decision by the bank not to allow him to apply for voluntary redundancy back in 2012 in comparison to the directors who were under 50.
The ET held that the directors who were under 50 were not appropriate comparators as there was a 'material difference' between their and Mr Donkor's circumstances. In the ET's view, Mr Donkor's complaint was that he had been prevented from applying for early retirement benefits. As the comparators were not entitled to early retirement benefits either, it could not be said that Mr Donkor had been treated less favourably. As a result the ET did not consider whether the treatment was justified.
EAT Decision
The EAT allowed Mr Donkor's appeal. It held that the essential difference between the circumstances of the directors who were under 50 and those of Mr Donkor was one of age and therefore they were in fact appropriate comparators.
The EAT found that Mr Donkor's case, that the comparators were given the opportunity to apply for voluntary redundancy whereas he was not, could amount to a detriment and less favourable treatment. As a result, the EAT found that there was a case for direct age discrimination but the case was sent back to the ET To consider whether the bank's actions could be objectively justified as this was not previously considered by the ET.
Best Practice
The costs of early retirement can be significant. Employers should therefore consider any such costs early on in a potential restructuring exercise which could result in redundancies. This case shows that there can be a case of age discrimination when employers make decisions on redundancy based on the costs of early retirement when it is an age-related factor. Employers would therefore be well advised to carefully consider any decision to exclude older employees from voluntary redundancy to ensure that such a decision can be objectively justified.