Heskett v Secretary of State for Justice

An employer cannot justify age discrimination by cost alone. It may, however, pursue the legitimate aim of operating within constrained resources, allocating those resources fairly, retaining staff, and preserving accrued rights. The distinction depends on the facts and the employer’s real objectives.

Under section 19(2)(d) of the Equality Act 2010, proportionality requires the tribunal to balance the discriminatory disadvantage against the undertaking’s needs. In that assessment, it may consider measures which mitigate the disadvantage, the allocation of limited resources, and genuine steps to replace or improve a temporary pay arrangement.

The claimant, a probation officer, challenged a pay-progression policy introduced after public-sector funding restrictions. The policy reduced annual progression from three pay points to one. It disproportionately advantaged older employees who had already reached, or were close to, the top of the pay scale.

The Employment Tribunal at Ashford found prima facie age discrimination but held that the policy was a proportionate means of achieving legitimate aims under section 19(2)(d) of the Equality Act 2010. The claimant appealed on the grounds that the policy was based on cost alone, that the tribunal wrongly treated prospective reform as justification, and that it wrongly inferred that the arrangement was temporary.

The central issue was whether the tribunal had erred in its approach to legitimate aim and proportionality.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the pay-progression policy was justified under section 19(2)(d) of the Equality Act 2010.

2. This was not a cost-alone case of the kind addressed in Woodcock v Cumbria Primary Care Trust [2012] EWCA Civ 330. The respondent had to operate within resources constrained by central-government policy. Its aims included maintaining an incentive and reward for staff, retaining essential employees, avoiding redundancies, preserving accrued rights, and distributing limited resources fairly. The absence of funds which required choices about allocation was materially different from an aim simply to save money.

3. The tribunal correctly treated proportionality as a balancing exercise. It was entitled to take account of the negotiations with unions, the prioritisation of lower-paid employees’ progression, the absence of increases for those already at the top of the scale, and the shortening of the scale’s entry point. Those measures mitigated, though did not remove, the discriminatory effect.

4. The respondent’s awareness of the discriminatory effect and its active steps towards reform were relevant to proportionality, rather than a free-standing legitimate aim. The tribunal assessed the policy as it then operated. It could also regard the underlying pay freeze and the resulting arrangement as temporary or transitional in nature. The reference to Naeem v Secretary of State for Justice [2017] UKSC 27 was not a misapplication of that authority.

5. No error of law or perversity was shown. The tribunal had identified the correct questions, weighed the relevant detriment and operational considerations, and reached a conclusion open to it.

• Employment Appeal Tribunal: dismissed the claimant’s appeal and upheld the Employment Tribunal’s finding that the pay policy was justified under section 19(2)(d) of the Equality Act 2010.
• Employment Tribunal, Ashford: found prima facie age discrimination but held that the policy was a proportionate means of achieving legitimate aims. Written reasons were issued in September 2017.