Woodcock v Cumbria Primary Care

The Court of Appeal dismissed Mr Woodcock's appeal against the Employment Appeal Tribunal. The principal legal issue was whether the respondent Trust's decision to serve a redundancy notice before consulting the claimant was direct age discrimination and, if so, whether it was justified as "a proportionate means of achieving a legitimate aim" under regulation 3 of the Employment Equality (Age) Regulations 2006 and Article 6 of Directive 2000/78/EC. The tribunals found that the timing of the notice had been motivated in part by the desire to avoid the substantial pension costs that would arise if the claimant reached age 50 during his contractual notice period, but that the dismissal itself pursued the legitimate aim of terminating redundant employment and that the means adopted were proportionate in the particular factual circumstances.

Background and parties: The appellant, Nigel Woodcock, was a long-serving NHS chief executive whose post was lost in an NHS reorganisation. His employer became the Cumbria Primary Care Trust. On 23 May 2007 the Trust gave him 12 months' notice of dismissal for redundancy without a prior formal consultation meeting. The claimant alleged unfair dismissal and age discrimination.

Procedural posture: The Carlisle Employment Tribunal (12 August 2009) dismissed the unfair dismissal claim but found prima facie age discrimination and then held the conduct justified. The Employment Appeal Tribunal (12 November 2010) allowed the claimant's appeal on the unfair dismissal procedural point (leading to a finding of automatic unfair dismissal) but dismissed the appeal on the age discrimination point. The claimant appealed to the Court of Appeal, which heard the matter on 7 December 2011 and delivered judgment on 22 March 2012.

Nature of the claim / relief sought: The claimant sought awards for unfair dismissal and compensation for age discrimination arising from the Trust's decision to serve a redundancy notice prior to consultation and timed so that his notice would expire before his 50th birthday (thereby preventing entitlement to enhanced early retirement benefits).

Issues framed:

• Whether the Trust's timing of the dismissal notice amounted to direct discrimination on grounds of age.
• If so, whether that discriminatory treatment was justified as "a proportionate means of achieving a legitimate aim" under regulation 3 of the 2006 Regulations and Article 6 of the Directive.
• Whether considerations of cost alone can constitute a legitimate aim or whether a "cost plus" justification is required.
• Whether the Employment Tribunal's factual findings as to availability of alternative posts and the practical effect of depriving consultation were perverse.

Court's reasoning: The Court reviewed the statutory test in regulation 3 and the relevant European jurisprudence. It acknowledged the established authority that budgetary considerations cannot, by themselves, constitute a legitimate aim in the social policy context, and discussed the "cost plus" approach developed in the EAT authority (Cross and others and Redcar & Cleveland). The court concluded that on the particular facts the Trust's aim was not purely to save costs but to give effect to the legitimate aim of dismissing an employee whose post had become redundant while also avoiding a substantial windfall pension cost. That combination fell within an acceptable justification framework. The Court accepted the Employment Tribunal's factual findings that no suitable alternative chief executive or director posts existed in the Trust, that consultation would in practical terms have achieved nothing, and that the claimant had had an unusually long period in which to seek alternatives. The proportionality balance therefore supported the tribunals' conclusion that the treatment was justified.

Wider context: The Court emphasised the fact-specific nature of justification in age discrimination cases, noting that while cost considerations are constrained by European authorities, employers may in some circumstances rely on cost-related considerations as part of a broader legitimate aim and proportionality assessment.

Appeal dismissed. The Court held that, on the facts found by the Employment Tribunal and as affirmed by the Employment Appeal Tribunal, the Trust's giving of a redundancy notice when it did was directly discriminatory in timing but was objectively justified. The dismissal pursued the legitimate aim of ending redundant employment and avoiding a substantial windfall pension cost; in the very particular circumstances the means were proportionate. The Court therefore dismissed the appeal against the dismissal of the age discrimination claim.

First instance: Carlisle Employment Tribunal (judgment dated 12 August 2009) dismissed the unfair dismissal claim and found age discrimination but held it justified. Employment Appeal Tribunal (Underhill J et al.), appeal dismissed on age discrimination point and allowed on procedural unfair dismissal point (12 November 2010, Appeal No. UKEAT/0489/09/RN). Permission to appeal to the Court of Appeal was granted by Elias LJ (on the papers, 17 January 2011) and by Smith LJ on renewed oral application (15 March 2011). This Court: [2012] EWCA Civ 330.