Air Products Plc v Cockram

Age-based treatment in an employment benefit may be justified under section 13(2) of the Equality Act 2010 where it is a proportionate means of achieving a legitimate aim. Intergenerational fairness can be a legitimate social-policy aim even when pursued through an employer’s own benefits arrangements. A bright-line retirement threshold may be proportionate if it rationally supports retention and consistent treatment between employee groups. Tribunals must scrutinise appropriateness, necessity and discriminatory impact, but the evidence required depends on the proposition advanced. Empirical proof of actual retention effects is unnecessary where the retention incentive is obvious and causation would be difficult to isolate.

Michael Cockram resigned from Air Products plc at age 50 and forfeited unvested awards under the company’s long-term incentive plan. The plan allowed retention of awards on retirement at or after the customary retirement age, fixed for United Kingdom employees at 55. Air Products accepted that the provision was directly discriminatory but contended that it was objectively justified.

The Employment Tribunal dismissed the age discrimination complaint. The Employment Appeal Tribunal, in UKEAT/0122/15/LA, allowed Mr Cockram’s appeal and remitted the matter, holding that the Tribunal had not sufficiently reasoned its conclusions on legitimate aim and proportionality. The central issue before the Court of Appeal was whether the Tribunal had erred in law.

The Court of Appeal allowed Air Products’ appeal and restored the Employment Tribunal’s dismissal of the age discrimination complaint. Lord Justice Leggatt agreed with Lord Justice Bean.

1. Legitimate aim. The Tribunal was entitled to accept evidence that the retirement exception balanced retention up to age 55 with retirement thereafter and opportunities for younger employees. Under section 13(2) of the Equality Act 2010, intergenerational fairness may constitute a legitimate social-policy aim. An objective pursued in the employer’s own interests may still be directly related to legitimate social policy. The Tribunal was therefore entitled to find that limiting the additional advantage enjoyed by predominantly older defined-benefit members was a legitimate aim. This was consistent with Seldon v Clarkson, Wright and Jakes [2012] ICR 716.
2. Evidence. Careful scrutiny of an employer’s justification is required, but the detail and weight of evidence depend on the proposition advanced. The observations in Hardy & Hansons plc v Lax [2005] ICR 1565 were accepted. However, it was unnecessary to prove that the rule had produced a measurable retention rate. The proposition that forfeiting unvested awards before the specified age encourages employees to remain until that age was sufficiently obvious, and its causal effect would be difficult to isolate from other employment decisions. MacCulloch v Imperial Chemical Industries PLC [2008] ICR 1334 was distinguishable because it concerned a failure to grapple with a substantial disparity in redundancy payments.
3. Proportionality. The Tribunal was entitled to find that age 55 was appropriate and reasonably necessary. It had a rational connection with the United Kingdom minimum pension age and achieved consistency between the defined-benefit and defined-contribution schemes. A difference between employees aged 54 and 55 did not itself defeat proportionality; bright-line rules are common in retirement benefits. The discriminatory effect, although potentially significant, arose when the employee chose to leave and concerned only unvested awards. The separate reference to rewarding experience and loyalty may have added little to the retention rationale, but it was only a minor part of the reasoning and did not undermine the other findings.
4. Appellate approach. On an appeal from the Employment Appeal Tribunal, the principal question was whether the first-instance Tribunal had erred in law. The Employment Tribunal’s reasons were adequate and contained no error of law. The Employment Appeal Tribunal should not have interfered with them.

1. Court of Appeal (Civil Division) — [2018] EWCA Civ 346: allowed Air Products’ appeal and restored the Employment Tribunal’s dismissal of the age discrimination complaint.
2. Employment Appeal Tribunal — UKEAT/0122/15/LA: allowed Mr Cockram’s appeal, found insufficient reasoning on legitimate aim and proportionality, and remitted the case to a freshly constituted tribunal.
3. Employment Tribunal, London South — judgment promulgated on 2 January 2015: dismissed the age discrimination and protected disclosures complaints.