The Lord Chancellor & Anor v McCloud & Ors

When government seeks to justify direct age discrimination, it must receive an appropriate margin of discretion on both its social policy aims and the means chosen. The tribunal must nevertheless decide objectively whether the aim is rational and legitimate in the particular employment context, and whether the means are proportionate. Generalised assumptions without a factual foundation cannot justify discriminatory treatment.

Indirect discrimination requires a causal link between the provision, criterion or practice and the group and individual disadvantage. It does not require a causal link between the disadvantage and the protected characteristic. A material-factor defence to an occupational pension equal-pay claim excludes factors involving direct or unjustified indirect sex discrimination.

Public service pension reforms replaced the existing judicial and firefighters’ schemes with less favourable schemes. Transitional provisions protected members closest to normal pension age fully or on a tapered basis. Younger members consequently received less protection or none.

The Employment Tribunal upheld the judges’ direct age discrimination claims, and the Employment Appeal Tribunal affirmed that result. A different Employment Tribunal dismissed the firefighters’ claims. The Employment Appeal Tribunal upheld its finding of legitimate aims but remitted proportionality for reconsideration.

The joined appeals concerned whether the age-based transitional protection was objectively justified. They also raised occupational pension equal-pay claims and indirect race discrimination claims under the Equality Act 2010.

1. Disposition. The appeal concerning the judges was dismissed. The firefighters’ appeals and cross-appeals were allowed, while the Government and Fire and Rescue Authorities’ appeals were dismissed. The transitional arrangements constituted unlawful direct age discrimination in both schemes. Liability was determined and the age claims were remitted for remedies.

2. Where government has a legitimate interest in a discrimination issue, the tribunal must afford it an appropriate margin of discretion in relation to both aims and means. The tribunal determines the existence of that interest and the breadth of the margin. It must then decide the case itself. Careful scrutiny and an appropriate governmental margin are compatible.

3. A potentially legitimate social policy aim is only the beginning of the inquiry. The tribunal must decide objectively whether the aim is rational and legitimate in the circumstances of the particular employment. A margin of discretion cannot rescue an irrational aim. Where materially different groups receive unequal pension pay for equal work, assertions that the policy felt fair or morally right are insufficient. The justification must be supported by evidence appropriate to its economic and social rationale.

4. The judicial Employment Tribunal had applied those principles correctly. Protecting older judges who were less adversely affected than younger judges lacked a rational explanation. Consistency with other public schemes could not justify treating materially different cases alike. In any event, the severe discriminatory and tax effects on younger judges went beyond what was reasonably necessary.

5. The firefighters’ Employment Tribunal had wrongly moved from finding potentially legitimate social policy aims to accepting their legitimacy without objective assessment. The Governments supplied no evidence explaining why older firefighters required full or tapered protection, why younger firefighters could adjust financially, or why the chosen age boundaries were justified. Generalised assertions could not satisfy the high burden of proving legitimacy. Only one conclusion was legally available, so liability was substituted without remitting that issue.

6. Indirect discrimination requires proof that a provision, criterion or practice causes particular disadvantage to a protected group and to the claimant. It does not require the reason for that disadvantage to be connected with the protected characteristic. A claimant falls outside the group if an independent reason, rather than the provision itself, caused the individual disadvantage.

7. Section 69(4) of the Equality Act 2010 must exclude a material-factor defence involving either direct or unjustified indirect sex discrimination. The judges’ equal-pay and indirect race claims therefore succeeded. The corresponding firefighters’ claims were remitted on the unresolved prima facie group-disadvantage and piggy-back issues.

1. Court of Appeal: The judicial employers’ appeal was dismissed. The firefighters’ appeals and cross-appeals were allowed, the contrary liability ruling was set aside, and unlawful age discrimination was substituted. The age claims were remitted for remedies.
2. Employment Appeal Tribunal: Sir Alan Wilkie affirmed the judicial age-discrimination decision. In the firefighters’ proceedings he upheld the finding of legitimate aims but held that proportionality had been approached incorrectly and ordered reconsideration.
3. Employment Tribunals: Judge Williams upheld the judges’ claims, finding no legitimate aim and, alternatively, disproportionate means. Judge Lewzey dismissed the firefighters’ age, equal-pay and indirect discrimination claims.