• Can an Employer Rely on Costs Alone When Justifying Discrimination?
  • November 30, 2010 | Author: Alex Denny
  • Law Firm: Faegre & Benson LLP - London Office
  • In the recent case of Woodcock v Cumbria Primary Care Trust (UKEAT/0489/09), the orthodox view that an employer is not entitled to rely on cost alone when justifying discrimination was challenged.  This could be good news for employers struggling to find a factor other than cost to justify discrimination and the decision opens the door to the possibility that cost may be a justification in its own right.

    Mr Woodcock was a Chief Executive of an NHS Trust. Following a reorganisation, his post became redundant. However, he was not given notice of redundancy immediately and instead worked in temporary positions for a year.  He was eventually given twelve months' notice of dismissal, but the notice was given prior to his formal redundancy consultation meeting to ensure that he did not turn 50 during his notice period.  If he had turned 50, he would have been entitled to take early retirement with significant increased costs to the Trust.  Mr Woodcock made claims for unfair dismissal and age discrimination, both of which were dismissed by the Employment Tribunal. With regards to the age discrimination claim, the Tribunal held that he was directly discriminated against because of his age, but the important question was whether the act was justified. It was held that avoiding significant additional cost was a legitimate aim and ultimately the discriminatory act was justified.

    The EAT upheld Mr Woodcock's unfair dismissal appeal, but dismissed his age discrimination appeal.  Mr Woodcock argued that the Tribunal had failed to apply the test set out in a previous case, Cross v British Airways ([2005] IRLR 423), which held that cost may be considered as a factor, but not the only factor when justifying discrimination.  However, the Judge in the EAT expressed doubt over this view and said that he could not see why there must be some other element in addition to cost.  Although his comments were obiter (and therefore non-binding), this could be good news for employers struggling to find a factor other than cost to justify discrimination and the decision opens the door to the possibility that cost alone may be a legitimate aim.