Rutherford & Anor v Secretary Of State For Trade & Industry

For indirect sex discrimination under Article 141, the statistical pool should normally comprise the entire workforce to which the disputed condition applies. The primary comparison is between the respective proportions of men and women able to comply with that condition. A tribunal may consider those unable to comply, but cannot confine its pool to them or to persons approaching the age at which they will be excluded.

A small difference between the proportions able to comply does not establish the considerable disparate impact required for indirect discrimination. In its absence, there is no basis to disapply the relevant age exclusions in the Employment Rights Act 1996, and objective justification does not arise.

Two male employees, aged over 65 when dismissed by insolvent employers, claimed unfair dismissal and redundancy payments. Sections 109 and 156 of the Employment Rights Act 1996 excluded employees over the default retirement age of 65 from those rights. The Secretary of State was joined because of potential statutory liability for claims against insolvent employers.

The employment tribunal held that the exclusions indirectly discriminated against men contrary to Article 141 and disapplied them. An earlier Employment Appeal Tribunal decision had set aside the first tribunal decision and remitted the cases: Harvest Town Circle Ltd v Rutherford [2002] ICR 123. Following a rehearing, the Employment Appeal Tribunal allowed the Secretary of State's appeal, set aside the tribunal's second decision and dismissed the claims.

The central issue was the proper statistical pool for assessing whether the age limit had a disparate adverse impact on men.

1. Appeals dismissed. Mummery LJ, with whom Scott Baker and Potter LJJ agreed, held that the employment tribunal had erred in law. It had confined the statistical pool to older employees who were, or might become, unable to satisfy the age condition. That approach excluded the large group of employees under 65 who could comply with it.

2. The approach in R v Secretary of State for Employment Ex parte Seymour-Smith [1999] ICR 447 required a pool consisting, in general, of the entire workforce to which the disputed age limit applied. The tribunal had to compare the respective proportions of men and women who could comply, and who could not comply, with the condition. The primary focus was on the proportions able to comply. Statistics about non-qualifiers could be relevant in a suitable case, but could not alone provide a sound basis for finding disparate impact.

3. On the evidence, the difference between the proportions of men and women under 65 able to comply was very small. It was not a considerable disparity in the sense required by Seymour-Smith. The applicants therefore had not established indirect sex discrimination under Article 141 of the Treaty of Rome. The age exclusions remained effective, the employment tribunal had no jurisdiction over the claims, and the claims had to be dismissed.

4. Obiter: objective justification did not arise. The court nevertheless held that, after equalisation of the age limit at 65, the different state pension ages did not taint the unfair-dismissal and redundancy exclusions with sex discrimination. If disparate impact had been established, objective justification would have required remittal to the employment tribunal to determine the legitimate social-policy aims and suitability of the measure.

5. Obiter: departmental witness statements, endorsed by a Minister, were evidence of the Secretary of State's position on social-policy justification. The tribunal had erred in treating them as merely the witnesses' personal understanding of government policy.

• Court of Appeal (Civil Division): dismissed the employees' appeals and upheld dismissal of their claims: [2004] EWCA Civ 1186.
• Employment Appeal Tribunal: on 2 October 2003, allowed the Secretary of State's appeal, set aside the second employment tribunal decision, and dismissed the claims.
• Employment Tribunal: on rehearing, held that the age exclusions were indirectly discriminatory, disapplied them, and accepted jurisdiction.
• Employment Appeal Tribunal: set aside the first employment tribunal decision and remitted the matter for rehearing: Harvest Town Circle Ltd v Rutherford [2002] ICR 123.