Facts

Mrs Edie was part of a group of a number of employees whose employment transferred to HCL Insurance BPO services Ltd (“HCL”) following a TUPE transfer.  HCL sought to bring in measures to harmonise the terms of its employees and to improve its profitability. HCL attempted to negotiate terms with its staff, but unilaterally imposed the changes after these negotiations proved unsuccessful. The changes led to a reduction in benefits for many of HCL’s staff.

Mrs Edie and her colleagues brought claims for indirect age discrimination in the Employment Tribunal. They claimed that the requirement to agree new terms and conditions put older employees at a particular disadvantage as those within the 38-64 age range were more likely to lose the considerable contractual benefits they had accumulated by reason of their long service. The Employment Tribunal held that the requirement to enter a new contract was a provision, criterion or practice (“PCP”), but also held this was objectively justified dismissed.

Mrs Edie and her colleagues appealed to the EAT.

Decision

The EAT first looked at whether there had been a PCP. HCL argued that change in terms cannot itself amount to a PCP unless the new substantive terms themselves give rise to a particular disadvantage. HCL referred to the EAT’s decision in ABN Amro v Royal Bank of Scotland, but the EAT said that this case was distinguishable on the facts. In the ABN Amro case there was one policy which applied to all employees; there was no time at which employees were treated differently from others, so a change in policy itself could not amount to a PCP.

In HCL’s case, the PCP being applied was a requirement that employees agree to new terms and conditions or be dismissed. That put some employees at a disadvantage because they had existing contractual rights which were different from those enjoyed by other employees. Other employees benefited from the changes.

The EAT went on to assess whether the PCP could be objectively justified. The EAT said that it was a legitimate aim for a business to seek to break even year-on-year, to reduce staff costs to ensure its future viability and to have in place market-competitive, non-discriminatory terms and conditions. The EAT also held that PCP was proportionate as it was both appropriate and necessary for HCL to make the changes in the way that it did. The EAT held that there was no reasonable way of achieving the aims without requiring employees to enter into a single set of terms.

The EAT therefore dismissed the appeal.

The judgment is available here.

Edie & 15 Ors v HCL Insurance BPO Services Ltd (Age Discrimination) [2015] UKEAT 0152_14_0502 (05 February 2015)