CITIBANK N.A. & Ors v NIELS KIRK

Where the burden of proof has shifted in an age-discrimination claim, an employment tribunal must carefully assess the employer’s credible explanation that age was not a reason for the treatment. A small age difference does not preclude discrimination, particularly where there is evidence capable of showing age-related motivation. In a non-cut-off case, however, the tribunal must address evidence that the claimant and comparator were perceived as being in the same age group.

A tribunal must also conduct the required comparative exercise for a hypothetical comparator. On remedies, a perversity appeal succeeds only in an overwhelming case. An employer alleging that a claimant’s shareholding reduces loss bears the burden of proving a reliable valuation.

The claimant, aged 55, was dismissed following a restructuring exercise. A 51-year-old peer, Ms Olive, was appointed to a new senior role. The East London Employment Tribunal upheld claims of unfair dismissal, age-related harassment and, in part, direct age discrimination. It found that a senior manager had described the claimant as old and set in his ways.

The Tribunal reduced compensation by 15% for the chance of a fair and non-discriminatory dismissal. It later awarded approximately £2.7 million and declined to offset the value of the claimant’s 35% shareholding in a consultancy established after dismissal.

The respondents appealed the liability judgment and both remedy judgments. The central liability issues were whether the Tribunal had properly considered the respondents’ explanation based on the small age difference and perceived age similarity, and whether it had conducted a proper hypothetical-comparator analysis concerning the appeal decision.

1. The liability appeal was allowed in part. The Tribunal made a sustainable finding that Mr Falco had made the remark that the claimant was old and set in his ways. It was not required to make a separate express finding on every item of evidence bearing on that central factual issue. Its reasons were Meek-compliant.

2. Under sections 5, 13 and 136 of the Equality Act 2010, a small age difference can support direct age discrimination. It may do so particularly where there is evidence of an age-related reason. In a case without an age cut-off, a small difference between employees in their fifties makes age discrimination less likely and requires careful scrutiny.

3. Once the burden shifted under Igen v Wong, the Tribunal had to assess the respondents’ prima facie credible and unchallenged evidence that the claimant and Ms Olive were perceived as being in the same broad age bracket. The Tribunal did not explain why that evidence failed to establish that age was not a reason for the dismissal. This was a material error in respect of Mr Falco, Mr Isaac and Mr Khullar.

4. The Tribunal also erred concerning Mr Bardrick. It did not properly compare the claimant’s treatment on appeal with that of a hypothetical younger employee in materially the same circumstances. Loyalty to other managers and incredulity at the allegation did not, without the comparative analysis, establish age-related less favourable treatment.

5. Both remedy appeals were dismissed. The Tribunal’s conclusion that Mr Husband might have been included in a fair selection pool was surprising but not perverse. The unfair-dismissal and discrimination assessments could properly be treated as intertwined.

6. The increased value of a post-dismissal shareholding may in principle be relevant to mitigation. The respondents bore the burden of proving the value to be offset. Given the inadequate valuation evidence, the Tribunal was entitled to decline to make a speculative valuation.

7. The liability issues were remitted to the same Tribunal, subject to any contrary case-management direction arising from the Employment Judge’s availability.

• Employment Appeal Tribunal: Allowed the liability appeal on grounds 2 and 3, dismissed the first and second remedy appeals, and remitted the outstanding liability issues to the same Employment Tribunal: [2022] EAT 103.
• East London Employment Tribunal: By a corrected liability judgment promulgated on 2 January 2020, upheld unfair-dismissal and some age-discrimination claims. It made a 15% remedy reduction and later assessed compensation at just under £2.7 million.