Air Products Plc v Cockram

The Court of Appeal allowed the employer's appeal and restored the employment tribunal's dismissal of the claimant's age discrimination complaint concerning forfeiture of unvested LTIP awards. The central legal principles were (i) direct age discrimination under section 13 of the Equality Act 2010 can be justified if it is a proportionate means of achieving a legitimate aim; (ii) the legitimate-aim and proportionality analysis in age discrimination claims is governed by the guidance in Seldon; and (iii) an employment tribunal's factual findings about the employer's aim and the proportionality of the means are entitled to deference unless they are legally erroneous.

The tribunal had accepted that the retirement exception (applying only from age 55) was directly discriminatory but found it was justified by legitimate aims including intergenerational fairness and encouraging retention up to a particular age, and that choosing 55 had a rational basis (it tied to the minimum pension age and to achieving consistency between employees on different pension schemes). The Employment Appeal Tribunal erred in concluding the tribunal's reasoning was insufficient; the Court of Appeal held the tribunal's findings were open on the evidence and did not disclose error of law.

Background and procedural history:

• The claimant, Mr Cockram, brought claims including unfair constructive dismissal, detriment for protected disclosures and age discrimination after he resigned and thereby forfeited unvested Long Term Incentive Plan (LTIP) awards. The unfair dismissal claim was struck out and that strike-out was unsuccessfully appealed to the Employment Appeal Tribunal in earlier proceedings (Cockram v Air Products plc [2014] ICR 1065).
• The age discrimination and detriment claims proceeded to a merits hearing before an employment tribunal at London South, which dismissed both claims in a judgment promulgated on 2 January 2015.
• The claimant appealed the tribunal's rejection of his age discrimination claim to the Employment Appeal Tribunal (EAT). The EAT allowed the claimant's appeal and remitted the age discrimination complaint for re-hearing by a freshly constituted tribunal.
• The employer obtained permission to appeal to the Court of Appeal against the EAT's order; the claimant cross-appealed seeking judgment in his favour. The Court of Appeal heard the appeal and allowed the employer's appeal, restoring the original employment tribunal decision dismissing the age discrimination complaint.

Nature of the claim / relief sought: Mr Cockram alleged direct age discrimination arising from forfeiture of unvested LTIP awards because the LTIP contained a retirement exception only for employees who left service at or after a customary retirement age, which the employer treated as 55. Relief sought: Not stated in the judgment.

Issues framed:

• Whether the LTIP retirement-exception provision (applying only from age 55) constituted direct age discrimination;
• if so, whether that treatment was objectively justified as a proportionate means of achieving a legitimate aim under section 13(2) of the Equality Act 2010;
• whether the employment tribunal's findings as to the employer's legitimate aims and the proportionality of the measure were supported by adequate reasoning and evidence (challenge raised by the EAT); and
• whether the matter should be remitted for re-hearing.

Court’s reasoning and outcome: The employment tribunal accepted that the retirement exception was directly discriminatory but held it was justified. It identified legitimate aims (intergenerational fairness, encouraging retention up to 55 and ensuring a generational mix) and found a rational basis for selecting age 55 (consistency with the minimum pension age introduced in 2010 and consistency between employees in the defined benefit and defined contribution pension schemes). The EAT held the tribunal had insufficiently explained its reasoning on aim and proportionality and remitted the case. The Court of Appeal concluded the tribunal's factual findings were open on the evidence, that the tribunal had given adequate and lawful reasons, and that the EAT had erred in remitting the case. The Court restored the tribunal's decision dismissing the age discrimination complaint.

Wider context: The Court applied the Seldon framework for assessing justification of direct age discrimination and emphasised the need to give appropriate deference to the tribunal as fact-finder where its reasoning is lawful and supported by evidence.

The appeal was allowed. The Court of Appeal held that the employment tribunal had not erred in law: it permissibly found that the LTIP retirement-exception provision, though directly discriminatory, pursued legitimate aims (notably intergenerational fairness and retention) and was a proportionate means of achieving those aims. The EAT should not have interfered and remitted the case; the tribunal's reasoning and factual findings were open on the evidence and disclosed no legal error, so its decision dismissing the age discrimination complaint was restored.

Employment Tribunal (London South) - judgment promulgated 2 January 2015 dismissing age discrimination complaint; Employment Appeal Tribunal allowed the claimant's appeal and remitted the issue for re-hearing (EAT decision not given a neutral citation in the judgment); Court of Appeal allowed the employer's appeal and restored the Employment Tribunal's decision [2018] EWCA Civ 346. Earlier related EAT decision on strike-out: Cockram v Air Products plc [2014] ICR 1065.