Facts

Magnox Ltd (“Magnox”), is a management and operations contractor responsible for safely managing twelve nuclear sites and one hydroelectric plant in the UK. Mr Peckham began employment with Magnox in April 2007. In 2015, Magnox began a companywide organisational restructure and an exercise was undertaken, entitled “Best Fit”, to match employees against roles in the new structure.

Following the Best Fit exercise, Mr Peckham was informed that he had not been allocated a role. He was given twelve weeks’ notice of termination. He was advised that Magnox would inform him of any suitable alternative positions which became available during the notice period. Of particular interest to Mr Peckham was the role of Head of Facilities Management (“HFM”).

Magnox did not consider the HFM role as suitable alternative employment for Mr Peckham, and the position was offered to another candidate. Mr Peckham was of the view that his age had played a part in the decision to not offer him the role. it was more cost-effective to dismiss him as there was a clawback provision in his pension scheme, the Electricity Supply Pension Scheme (“ESPS”). Mr Peckham’s employment was therefore terminated upon expiration of his notice.

Mr Peckham brought claims of direct and indirect age discrimination for failing to appoint him to the role of HFM and for applying a clawback provision which entitled him to only statutory redundancy. Mr Peckham argued that the application of the clawback was a provision, criterion or practice that put employees over 62 or 63, at a particular disadvantage. 

Decision

The Tribunal dismissed Mr Peckham’s claims of direct and indirect age discrimination.

The Tribunal found that the principal reason for Mr Peckham’s dismissal was redundancy. The Tribunal  did not accept, as Mr Peckham had submitted, that the principal reason for his dismissal was because he was cheaper to dismiss than other employees. Mr Peckham did not suffer direct age discrimination when he was not appointed to the HFM role. The Tribunal was not presented with any evidence supporting the argument that the fact that Mr Peckham was 63 and/or would not be entitled to severance had been a relevant factor in his being deemed unsuitable for the HFM role.  

However, the Tribunal ruled that Mr Peckham’s claim of age discrimination in relation to the operation of the clawback provision was well founded. Magnox had accepted that the  clawback provisions were directly discriminatory, meaning that the issue for the Tribunal was to decide whether the provision was objectively justified as a proportionate means of achieving a legitimate aim.

The Tribunal identified “cushioning” as a legitimate aim, which meant ensuring that severance money should be distributed to those most in need of it. Employees aged 63 and over are able to use their pension provision to cushion the effect of redundancy, so were less in need of a cushion. The Tribunal referred to Loxley where a similar scheme was held to be proportionate.

However, the Tribunal found no evidence that Magnox had considered a less discriminatory means of achieving the legitimate aim identified, so the clawback provision was deemed disproportionate.   

The judgment is available here.

Mr M Peckham v Magnox Limited, 27 July 2017, case number 2301637/2016