Facts

On reaching the retirement age of 50 under Air Product Plc’s (“APP”) defined benefit pension scheme Mr Cockram left APP and started to take his pension.  During his employment Mr Cockram had received stock options under APP’s Long Term Incentive Plan (“LTIP”).  Some were vested and some were unvested at the point of Mr Cockram’s retirement.  Under the terms of the LTIP employees retiring at the ‘customary retirement age’ were entitled to receive both vested and unvested benefits.

APP refused to grant the unvested benefits to Mr Cockram and maintained that the ‘customary retirement age’ under the LTIP was 55.  This was the retirement age as set out in the defined contribution pension scheme set up in 2005.  APP accepted that this amounted to direct age discrimination and sought to justify this treatment as a proportionate means of achieving a legitimate aim. 

The Employment Tribunal (“ET”) accepted APP’s submissions that their aim to achieve consistency between employees was a legitimate aim and dismissed Mr Cockram’s claim of age discrimination.  Mr Cockram appealed to the Employment Appeal Tribunal.

Decision

The appeal was upheld and the case was remitted to a freshly constituted ET to decide whether the discrimination was justified. 

The ET had erred in law by finding APP’s aim to treat employees under different pension schemes consistently was ‘intergenerational fairness’.  The ET needed to explain why the aim included intergenerational fairness and why certain evidence was preferred.  The ET had not done so.

The ET had also not sufficiently explained why the treatment was proportionate by comparing the loss of Mr Cockram against the stated aims of APP.  There was some dispute between the parties on the exact value of the loss of benefits (£27,000 to £245,000); however even on APP’s figure the loss to Mr Cockram was significant. 

The judgment is available here.

Cockram v Air Products Plc (Age Discrimination) [2015] UKEAT 0122_15_2411 (24 November 2015)