Directive 2000/78, Age discrimination and the Supreme Court

Prof. Aileen McColgan

On 25 April 2012 the Supreme Court handed down two major judgments on age discrimination: Homer v Chief Constable of West Yorkshire Police [2012] UKSC 15 and Seldon v Clarkson Wright and Jakes [2012] UKSC 16. In both cases Lady Hale delivered the leading judgment with which the other Supreme Court Justices all agreed. As might have been expected in the circumstances, the decisions shine the light of principle on this contested and difficult area of law.

Discrimination on grounds of age, alone of all the characteristics now protected by the Equality Act 2010, is capable of discrimination whether the discrimination is direct or indirect. Discrimination relating to the other protected characteristics (broadly sex, race, disability, sexual orientation and religion/belief) is subject to a general justification defence only where it takes the indirect form. In this, the Equality Act and its predecessor provisions (specifically the Employment Equality (Age) Regulations 2006, under which the Seldon and Homer cases were brought) mirror the provisions of Council Directives 2000/43 and (of direct relevance here) 2000/78.

Seldon concerned the question whether direct age discrimination in the form of mandatory retirement aged 65 was justifiable. At the time, domestic law provided a default retirement age of 65, subsequently abolished. The default retirement age was not applicable to the claimant in Seldon, however, given that he was a partner in a law firm. The firm’s policy was to retire partners at 65 in order (1) to ensure that associates could progress to partnership after a reasonable period; (2) facilitate long-term workplace planning and (4) “limit[] the need to expel partners by way of performance management, thus contributing to a congenial and supportive culture”. The question for the Supreme Court was whether this approach was lawful, in particular, whether the imposition of a mandatory retirement age by an employer could be justified by reason of Article 6(1) of Directive 2000/78 which provides that “Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary”.

Lady Hale having pointed out that the Directive acknowledged, in recital 25, “that age discrimination might be justified by factors which had nothing to do with the characteristics of the individual but had to do with broader social and economic policy” [3], suggested that the reason that these factors could justify direct discrimination on the ground of age alone was [4] because “age is different… not ‘binary’ in nature (man or woman, black or white, gay or straight) but a continuum which changes over time… younger people will eventually benefit from a provision which favours older employees, such as an incremental pay scale; but older employees will already have benefitted from a provision which favours younger people, such as a mandatory retirement age”. Lady Hale posed [5], as the “critical issues in this case … what sort of policy considerations can justify such discrimination, who decides upon them, and how they are to be applied to any individual person”.

It was argued for Mr Seldon that the domestic Regulations, which provided the same justification test for direct and indirect discrimination (Reg 3: whether the measure complained of was “a proportionate means of achieving a legitimate aim”), were incompatible with the Directive which, it was suggested, permitted direct discrimination to be justified only in line with Article 6(1) which, it was said, was directed only at the broad policy aims of the state rather than with those of the individual employer. Lady Hale reviewed the authorities at domestic and CJEU level (the latter consisting of no fewer than 12 cases from Mangold v Helm [2006] 1 CML 1132 to and Case C-447/09 Prigge & Ors v Deutsche Lufthansa AG [2011] IRLR 1052). From these cases she drew the following conclusions ([50], my numbering):

(1)   that direct age discrimination could be justified only by reference to social policy objectives of a public interest nature;

(2)   that the tests for justification of indirect and direct (age)discrimination were not identical;

(3)   that it was for Member States rather than individual employers to establish the legitimacy of the aim pursued;

(4)   that flexibility for employers was not itself a legitimate aim, although “a certain degree of flexibility may be permitted to employers in the pursuit of legitimate social policy objectives”;

(5)   that among the (overlapping) legitimate aims recognised to date in this context have been:

  1.  the promotion of access to employment for younger people;
  2. the efficient planning of the departure and recruitment of staff;
  3. the fair distribution of employment opportunities across generations;
  4. ensuring a mix of generations of staff so as to promote the exchange of experience and new ideas;
  5. rewarding experience;
  6. cushioning the blow for long serving employees who may find it hard to find new employment if dismissed;
  7. facilitating the participation of older workers in the workforce;
  8. avoiding the need to dismiss employees on the ground that they are no longer capable of doing the job which may be humiliating for the employee concerned; and
  9. avoiding disputes about the employee’s fitness for work over a certain age.

(6)   that in all cases “the measure in question must be both appropriate to achieve its legitimate aim or aims and necessary in order to do so”, the gravity of the effect on the employees discriminated against being weighed in the balance against the importance of the legitimate aims pursued;

Lady Hale suggested that the legitimate aims recognized by the CJEU could be characterized as relating to two broad aims: “inter-generational fairness” and “dignity” [56], [57]. The former was “comparatively uncontroversial” the latter “more controversial”, Lady Hale expressing “some sympathy” [58] for the view that arguments linking age to incapacity (as in (5)(h) above) “look suspiciously like stereotyping” [57] but stating that “the Luxembourg court has held that the avoidance of unseemly debates about capacity is capable of being a legitimate aim” [58].

Regulation 3 of the Age Regulations could be interpreted [55] as indicating the exercise of a choice by the UK ”to give employers and partnerships the flexibility to choose which objectives to pursue, provided always that (i) these objectives can count as legitimate objectives of a public interest nature within the meaning of the Directive and (ii) are consistent with the social policy aims of the state and (iii) the means used are proportionate, that is both appropriate to the aim and (reasonably) necessary to achieve it”. The question was not generally, Lady Hale ruled, whether the application of the mandatory rule to the individual (Mr Seldon) could be justified in line with this test (the requirement for such justification “in many cases … negat[ing] the purpose of having a rule” [65]), rather whether the adoption of a mandatory age by the employer could be so justified [66].

Turning to consider the application of the justification test in the particular case, Lady Hale accepted the conclusion of the Tribunal that the aims pursued by the Defendant were legitimate. As to the question of proportionality – specifically, whether the ends pursued justified the selection of a retirement age at 65, as distinct from any other age, the Employment Appeal Tribunal had concluded that the fixing of the retirement age at 65 was not proportionate to the third aim pursued and had referred back to the Tribunal the question whether that age could be justified by reference to the other legitimate aims alone. That referral stood, Lady Hale suggesting that “In answering that question, I would not rule out their considering whether the choice of a mandatory age of 65 was a proportionate means of achieving the first two aims. There is a difference between justifying a retirement age and justifying this retirement age” [68].

The question of proportionality also fell to be referred back to the Tribunal in Homer, which concerned indirect rather than direct age discrimination. The question was whether a requirement that, in order to achieve promotion beyond a certain grade, candidates had to be in possession of a law degree or equivalent indirectly discriminated against older workers. The Claimant was 62 at the point at which he was disadvantaged by the rule, a mandatory retirement age of 65 (extendable by one year at the discretion of the employer) then operating within the Defendant organisation. He argued that, completion of any law degree taking him beyond his retirement date, he was the victim of unjustified age discrimination against those aged 60-65. A Tribunal upheld his claim but the EAT and the Court of Appeal ruled that the employer had not applied any provision criterion or practice which disparately impacted on him as an older worker. According to these courts, any disadvantage the Claimant experienced resulted from his proximity to leaving the Defendant’s employment (albeit because of the Defendant’s mandatory age-related termination policy), rather than from the Defendant’s rule about qualifications.

In reaching this conclusion the EAT and Court of Appeal adopted the same rigid and unhelpful approach to the identification (subject to questions of justification) of indirect discrimination as has characterised much of the domestic jurisprudence since the early days of the Sex Discrimination Act 1975. Lady Hale was having none of it:

“13. This argument involves taking the particular disadvantage which is suffered by a particular age group for a reason which is related to their age and equating it with a similar disadvantage which is suffered by others but for a completely different reason unrelated to their age. If it were translated into other contexts it would have alarming consequences for the law of discrimination generally. Take, for example, a requirement that employees in a particular job must have a beard. This puts women at a particular disadvantage because very few of them are able to grow a beard. But the argument leaves sex out of account and says that it is the inability to grow a beard which puts women at a particular disadvantage and so they must be compared with other people who for whatever reason, whether it be illness or immaturity, are unable to grow a beard.

14. Ironically, it is perhaps easier to make the argument under the current formulation of the concept of indirect discrimination, which is now also to be found in the Equality Act 2010. Previous formulations relied upon disparate impact – so that if there was a significant disparity in the proportion of menaffected by a requirement who could comply with it and the proportion of women who could do so, then that constituted indirect discrimination. But … the new formulation was not intended to make it more difficult to establish indirect discrimination: quite the reverse … It was intended to do away with the need for statistical comparisons where no statistics might exist. It was intended to do away with the complexities involved in identifying those who could comply and those who could not and how great the disparity had to be. Now all that is needed is a particular disadvantage when compared with other people who do not share the characteristic in question. It was not intended to lead us to ignore the fact that certain protected characteristics are more likely to be associated with particular disadvantages…

17… The law of indirect discrimination is an attempt to level the playing field by subjecting to scrutiny requirements which look neutral on their face but in reality work to the comparative disadvantage of people with a particular protected characteristic. A requirement which works to the comparative disadvantage of a person approaching compulsory retirement age is indirectly discriminatory on grounds of age…”

Lady Hale went on to rule that the question of justification had to be referred back to the Tribunal to consider, the approach taken at first instance having been flawed. The correct approach required [22] consideration of appropriateness and necessity, the latter including the question of proportionality. Whether the imposition of the rule was justified required [24] a comparison of the impact of that criterion upon the affected group as against the importance of the aim to the employer” and [25] “[t]o some extent … whether there were nondiscriminatory alternatives available”.

Whatever the eventual outcome of this case (Lady Hale giving a gentle steer to the Defendant to make an exception in Mr Homer’s case, an approach from which Lord Mance alone demurred), the decision is to be welcomed for its purposive approach to indirect discrimination. This area of the law has been dogged since the beginning by an unduly technical approach to a question the answer to which should turn largely on the question of justification. It is, in particular, doubtful whether the recent decision of the Court of Appeal in Eweida v British Airways plc [2010] ICR 890, currently before the European Court of Human Rights, is consistent with the approach adopted by the House of Lords in Homer.

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