Facts

The employee was employed by Tower Hamlets Council. He was approaching his 50th birthday in July 2007. Under the terms of his pension he would be entitled to early retirement pension if he remained in employment until that birthday.

Prior to that birthday the council had to make him redundant and looked at alternative employment/transfer etc but ultimately could not identify any suitable alternative employment and his employment was terminated in December 2006, with the result that he would not be entitled to the early retirement pension.

The employee brought a claim of unfair dismissal and unlawful age discrimination. The dismissal was automatically unfair simply because the council did not follow any statutory dismissal procedure then in force. On age discrimination it was noted that in the evidence the Council had stated “if he goes now, we do save the pension”. This comment demonstrated to the Tribunal that it was the Claimant’s age and subsequently his entitlement to impending increased pension benefits that became the tipping point in the decision to dismiss. The Tribunal considered that an employee who was not age 49 would not have been treated in the same way and therefore upheld the claim of age discrimination. The employer appealed however that appeal was unsuccessful.

Comment

The case should serve as a warning to employers of the risk of dismissing an employee to prevent entitlement to an age related benefit.  Interestingly the council did not offer the defence of justification under the age discrimination laws and therefore it is still questionable whether dismissing in order to minimise pension liabilities can ever be justified under the age discrimination legislation. Future cases may yet clarify.