Facts
The full facts can be found in our summaries of the Employment Appeal Tribunal decision (“EAT”) and the original Employment Tribunal decision (“ET”). In summary, they are as follows.
Mr Woodcock was Chief Executive of North Cumbria Primary Care Trust (“the Trust”) and was made redundant following the merger of a number of Primary Care Trusts in the area. He was dismissed one month before his 50th birthday so that the Trust would avoid having to pay him an enhanced pension. Both the ET and EAT said that this was justified age discrimination. Mr Woodcock appealed to the Court of Appeal.
Decision
Mr Woodcock’s appeal to the Court of Appeal followed a similar line as his EAT appeal. He argued that the Trust’s justification was solely focused on costs grounds (“costs alone”), and Cross said that only “costs plus some other factor” can be capable of justifying age discrimination.
The Court of Appeal held that the authorities were clear and agreed that Cross said considerations based on “cost alone” could not justify age discrimination. However, the Court of Appeal agreed with both the ET and EAT that this was not a “costs alone” case and was actually a “costsplus” case. The Trust’s treatment was not aimed at merely saving costs, but at giving effect to their genuine decision to terminate Mr Woodcock’s employment on grounds of redundancy, and there could be no doubt that dismissal on grounds of redundancy could be a legitimate aim.
The Court of Appeal also held redundancy would not cease to be a legitimate aim simply because, if there was no dismissal, the Trust would continue to incur costs. The ET and the EAT were correct in saying that it was a legitimate part of that aim for the Trust to ensure that, in giving effect to it, the dismissal also saved the trust the additional element of costs that would have been incurred, had it not timed the dismissal when it did.
Conclusion
This decision leaves “costs plus” as the legal test; “costs alone” cannot justify discrimination.
However, this decision broadened the “costs plus” analysis by focusing on the issue of how the employer’s “legitimate aim” is identified. By drawing this broadly, on the basis that the aim was to carry out a legitimate redundancy exercise without additional cost to the employer, it was possible to show that the Trust’s conduct was not solely to save costs.
The judgment is available here.
For a paper on costs-based justification, go to our training archives.
Mr N Woodcock v Cumbria Primary Care Trust, [2012] EWCA Civ 330