What Is The Correct Approach To Comparators In An Age Discrimination Claim?

In Donkor v Royal Bank of Scotland (RBS), the EAT considered whether the circumstances of younger workers were materially different to those of older workers in a redundancy exercise because they were not eligible for early retirement pension enhancements.

Mr Donkor (Mr D) worked for RBS as a Regional Director. During a restructuring in 2012, the bank carried out a preliminary selection exercise on paper to decide who was to be interviewed for new roles and who was to be given the option to apply for voluntary redundancy. Those aged over 50 who were not given an interview would also be given the option of early retirement (which is not unlawful discrimination due to the Equality Act (Age Exceptions for Pension Schemes) Order 2010).

Mr D was one of four Regional Directors not selected for interview, of whom he and one other were aged over 50. The two Regional Directors under 50 (Ms Alexander and Mr Batey) applied for and were given voluntary redundancy. When the severance costs for the over-50s were calculated, the bank had a change of mind mainly due to the enhanced pension costs that would arise for those taking voluntary retirement. Since, in Mr D's case, this would have resulted in severance costs of over £500,000 (most of which was related to pension enhancement), higher management authority would be required, and it was not thought that this would be given while there were still roles to fill.

Mr D and the other Regional Director aged over 50 were therefore given the opportunity to apply for an alternative role. The bank told Mr D that he did not have the option of voluntary redundancy while this role was on offer. Mr D applied for and was appointed to the role.

In 2013 there was a further restructuring, in which Mr D applied successfully for voluntary redundancy. However, the pension scheme rules had been changed in the interim, and only those aged over 55 were entitled to early retirement benefits. Mr D was therefore no longer eligible.

Mr D brought an Employment Tribunal (ET) claim arguing that the decision not to allow him to apply for voluntary redundancy in the 2012 restructuring, as it had Ms Alexander and Mr Batey, was an act of direct age discrimination.

The ET held that Ms Alexander and Mr Batey were not appropriate comparators, because the fact that they were not entitled to early retirement benefits was a "material difference" between their circumstances and those of Mr D. Even if Ms Alexander and Mr Batey were appropriate comparators, the tribunal held that Mr D had not been treated less favourably than them. His complaint had been that he had not been allowed to apply for early retirement benefits. Since Ms Alexander and Mr Batey were not entitled to early retirement benefits either, the ET found it difficult to see how it could be said that Mr D had been treated less favourably.

In any event, the tribunal thought that the treatment was not on grounds of age but on grounds of the cost of his redundancy package and the unlikelihood of that being approved when there was an alternative role available. The ET did not consider justification.

Mr Donkor appealed to the EAT and his appeal was allowed.Top The EAT held there was a prima facie case of direct age discrimination that was made out. The case was remitted to the same ET to determine justification. The EAT held, that the ET had been wrong to find that Ms Alexander and Mr Batey were not appropriate comparators. Any difference between their circumstances and Mr D's was, in reality, simply one of age. It was only because of his age that Mr D was eligible for early retirement benefits and they were not.

The EAT noted the ET's finding that neither Mr D nor his comparators had been allowed to take early retirement and so there was no less favourable treatment. However, that was not the case that Mr D had advanced. He had complained that the comparators had been given the opportunity to apply for voluntary redundancy whereas he had not. RBS conceded that this could amount to a detriment and less favourable treatment (subject to the caveat that his application might not have been accepted).

The EAT rejected the tribunal's conclusions that the reasons for the treatment were cost, legal risk and the need to obtain approval, rather than Mr D's age. All the factors identified were simply matters arising from Mr D’s age. The EAT had no hesitation in holding that the only permissible conclusion was that a prima facie case of direct age discrimination was made out. However, that still left the question of justification, which had not been dealt with by the ET at first instance. The case was remitted back to the ET to determine the issue of justification.

Although this case does little more than just apply existing authority, it serves as a useful reminder of just how easy it is to cloud the real issues in a discrimination case by focusing too closely on whether a given individual is an appropriate comparator. The key issue in direct discrimination cases is the "reason why" issue - in other words, why RBS acted as it did. If a respondent applies a criterion which itself distinguishes between people based on a protected characteristic, this is itself discriminatory. In this case, the additional cost of giving a non-discounted early retirement pension was a factor that only applied to the over-50s and therefore to have taken it into account was prima facie discrimination. Having found that the employer had based its decision on the cost of early retirement, which was an age-related factor, the only remaining question was whether the employer's actions were justified.