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Rejecting the argument put forward by Gallaher Ltd that the means adopted were proportionate and necessary to achieve a legitimate aim, the Industrial Tribunal found that Mr Barlow was discriminated against on the grounds of his age as he was excluded from its enhanced severance package.

Background

In May 2014, Bernard Barlow notified Gallaher Limited that he wished to work after he had reached 65 in February 2016. However, in January 2015, Gallaher Ltd announced that it would close its Ballymena factory, and thereafter discussions took place with Unite (the recognised trade union) on redundancy packages.

The package was based on a contractual redundancy scheme in place from 2009 which stated “entitlement… only applies up to age 65” with employees over 65 only receiving statutory redundancy pay.

This redundancy scheme had not been amended following the removal of the “Default Retirement Age” in October 2011.

Severance package

A final severance package was agreed between Management and the Trade Union (Unite) in February 2015.

The Tribunal noted that during the negotiation process the views of the workers over 65 years were not specifically canvassed by either the management side or trade union side, nor did management undertake an equality audit to ascertain whether the scheme might potentially discriminate against that group of workers.

All employees were asked to sign a settlement agreement which would take effect in 2017, however Mr Barlow did not sign up as the sum he would receive was less than employees under 65 years, which he believed was discriminatory. The effect of this was that he was unable to avail of any benefits from the package (other than a pay increase component) unless he was prepared to abandon his claims of age discrimination

An internal grievance was unsuccessful, with Gallaher Ltd justifying the scheme on three grounds:

Mr Barlow lodged his claim with the industrial tribunal in May 2015, and Gallaher Ltd responded by putting forward the case that the means adopted were proportionate and necessary to achieve a legitimate aim.

Decision

In reaching its conclusions, the Tribunal emphasised that “the fact that aims are legitimate does not mean that any discrimination is justified”. It must be considered whether any legitimate aim could have been achieved by more lenient and equally suitable means (as per Handels-og-Kontorfunktionaererues Forbund Danmark (HK) (on behalf of Kristeusen) v Experian H/S ICR 27).

As per McCulloch v ICI Plc IRLR 848, any balancing exercise will have to have regard to the impact which any different scheme would have on the whole range of employees.

The Tribunal also emphasised that, as per BAE Systems (Operations) Ltd v Mr C McDowell , it had to “test whether the cap on payments to those over 65 was justified as part of the broader severance framework and in light of the aims it was designed to achieve, viewed collectively”.

The Tribunal was satisfied that that Gallaher Ltd was “genuine in its desire to see that the resources for enhanced redundancies payments would be spread fairly and equitably across the workforce” but stated that the “inescapable reality” was that employees who were over 65 “were completely excluded from the benefits of the company’s enhanced severance scheme”

Further, there was no evidence that Gallaher Ltd “seriously considered any alternative methods which could have constituted a proportionate way of achieving its aims…to try to ensure that the claimant and those in his position who had given long years of service were not restricted to statutory redundancy pay”.

The Tribunal was not satisfied that Gallaher Ltd “took any meaningful steps to evaluate or analyse its scheme on an ongoing basis… no transitional measures were considered, which could have mitigated the discriminatory effects of the scheme” – which was due at least in part to Gallaher Ltd “focus on cost neutrality”

As such, the Tribunal held that Mr Barlow “suffered both direct and indirect discrimination on the ground of age”.

Judge Buchanan noted that Mr Barlow had provided a schedule of loss, and stated that the Tribunal would “issue a short supplementary decision dealing with compensation” after a period of 21 days to provide for parties to make any representations on quantum.