The abolition of the default retirement age of 65 brought about the prospect of claims of direct discrimination under the Equality Act 2010 (the Act) for any dismissal because of a person’s age.  But as Lady Hale points out in the recent Supreme Court decisions in Seldon v Clarkson Wright & Jakes [2012] UKSC 16 and Homer v Chief Constable of West Yorkshire Police [2012] UKSC 15, we still have “a lot of learning to do” when it comes to questions of justification for age discrimination, both direct and indirect, even in the absence of a default retirement age.  In this update we focus on the case of indirect discrimination as it is often in these situations where an employer can inadvertently fall foul of the Act’s provisions.

Indirect Discrimination – employee required to have law degree to obtain higher pay grade

Mr Homer was employed by the Police National Legal Database (PNLD) as a legal advisor after previously being employed as a Detective Inspector with the West Yorkshire Police Force.  He did not have a law degree but had been employed as a legal advisor after account was taken of his “exceptional experience” in criminal law.  PNLD subsequently experienced difficulties attracting and retaining suitably qualified staff.  It sought to put in place a three-tier pay grade progression, with the third tier requiring a law degree.

Mr Homer was re-graded to the second tier, but could not move up to the third tier unless he obtained a law degree.  Ordinarily Mr Homer might well have sought to do so, but by the time the pay grades were introduced he was aged 62 and PNLD operated a mandatory retirement age of 65.  Mr Homer would have needed to undertake four years of part time study and so could never have achieved the third tier before being required to retire.  He brought a claim in the Employment Tribunal which held that he had been indirectly discriminated against on the grounds of his age and that this was not objectively justified.  This finding of indirect discrimination was overturned in the Employment Appeal Tribunal which found that he had not been indirectly discriminated against.  Mr Homer was then unsuccessful in his appeal to the Court of Appeal.

Decision

On Mr Homer’s further appeal to the Supreme Court (the Court) it was argued by PNLD that what put Mr Homer at a disadvantage was not his age but the fact of his impending retirement, and it was this fact that was preventing him from obtaining a law degree.  PNLD argued that this could not constitute indirect age discrimination because those who would be leaving the employment of PNLD for reasons other than retirement would face the same issues as Mr Homer whatever their age; that is they would also not have the necessary time to obtain the law degree prior to leaving employment.

The Court rejected this argument.  It held that individuals in Mr Homer’s age group – those aged between 60 and 65 – were put at a disadvantage because they did not have the time to obtain a law degree before they reached the age of retirement, and the reason why they did not have time was because they were being forced to retire.  On that basis, the Court found that Mr Homer had been indirectly discriminated against on the grounds of his age.  The Court reiterated the point that “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 like the one imposed by PLND fell squarely within this concept and the protected characteristic of age.

The Court remitted the case to the Employment Tribunal to consider whether PNLD was justified in applying the requirement to have a law degree to attain the third tier as a proportionate means of achieving the legitimate aim of attracting and retaining suitably qualified staff, as the Court found that the Employment Tribunal had not properly considered this issue.

Comment

In discussing the appropriate approach to justification for indirect discrimination, the Court made an important distinction between direct and indirect discrimination, stating that justification is not limited to social policy or other objectives “but can encompass a real need on the part of the employer’s business”.  In the context of this case, the Court was asking whether the requirement to obtain a law degree before being able to achieve the highest pay grade was proportionate to the employer’s stated aims of recruiting and retaining suitably qualified staff, and also whether it was reasonably necessary to deny benefits of the higher pay grade to those in Mr Homer’s position.  Unfortunately, the case has been remitted to the Employment Tribunal to determine this question of proportionality and we therefore do not currently have an answer to this important question.

What can be taken from the judgment, however, are some helpful pointers regarding indirect discrimination.  In particular, an employer should always consider whether there are non-discriminatory alternatives available to imposing the requirement.  Here it appears that PNLD could have made an exception for Mr Homer, and “grandfathered” the rule such that it did not have the discriminatory impact.  However, the Court raised the valid prospect that, if an employer did make a personal exception for Mr Homer or for others who were in the same age group, this might well have a discriminatory impact on those outside the age group – i.e. those who would be required to undertake a law degree to be elevated to the third tier and did have the time to undertake the law degree course.  A non-discriminatory impact might therefore be more difficult to achieve in practice than in theory as a result.

In any event, what the case reiterates is that prior to the introduction of any “blanket” rule or policy by an employer, there must be an assessment of whether the introduction of that policy would inadvertently discriminate against any individual or class of individuals on the basis of a protected characteristic.  It will not be enough for an employer to assume that applying a policy equally will avoid the bite of the Act’s provisions, as this is exactly what indirect discrimination envisages.

Ultimately, the field of discrimination is not an easy one for an employer to navigate itself through and, as Lady Hale put it, we all still have a good deal of learning to do to understand the consequences of rules that might well have discriminatory impacts.

For further information please contact Niki Avraam, Matthew McGoldrick or the Partner with whom you usually deal.