In Braithwaite and ors v HCL Insurance BPO Services Ltd and another case, the EAT has upheld the finding of an employment tribunal that an employer’s decision to impose new terms and conditions was not unjustified indirect age discrimination. The employer’s requirement that its employees agree to new terms and conditions or be dismissed was a provision criterion or practice that put employees in the age group 38-64 at a particular disadvantage. However, given that there was no practical alternative open to the employer, that disadvantage was justified as a proportionate means of achieving the employer’s aim of reducing staff costs to ensure its future viability and having in place a market-competitive, non-discriminatory set of terms and conditions.
The employment of the claimants transferred to HIBS Ltd under the Transfer of Undertakings (Protection of Employment) Regulations 2006 SI 2006/246. As a result, their terms and conditions differed substantially from others in its workforce. The employer was incurring substantial losses. Following consultation, it decided to introduce standardised terms and conditions for all employees, which would remove a number of benefits enjoyed by the claimants. All employees of HIBS Ltd were informed that, should they not agree to the new terms, they would be dismissed on 15 June 2011. Some of the claimants agreed to the new terms and began working under them on 16 June, others refused and were dismissed. The claimants complained to an employment tribunal that, among other things, the imposition of the new terms was unjustified age discrimination.
The tribunal found that the HIBS Ltd had applied a provision, criterion or practice (PCP) that if its employees wished to remain employed, they were required to enter into a new contract with effect from 16 June 2011 under which they would not have contractual entitlements to private health insurance, carer days and enhanced redundancy payments and in which their working hours would be 37 hours per week and annual leave would be 25 days a year. This PCP put older workers in the age band 38-64 at a particular disadvantage because it was they who had built up greater entitlements through longer service. However, the tribunal accepted the employer’s argument that the PCP was a proportionate means of achieving a legitimate aim: namely, to reduce staff costs to ensure the business’s future viability and to have in place market-competitive, non-discriminatory terms and conditions. The claimants appealed this finding of justification, and the employer cross-appealed the finding that it had applied a PCP that put the claimants at a particular disadvantage.
On appeal, the EAT addressed the PCP point first. It rejected the employer’s argument that the earlier decision of the EAT in ABN Amro Management Ltd and anor v Hogben EAT 0266/09 applied to the instant case. In Hogben, the EAT had held that the employer’s change of bonus policy was not capable of amounting to a PCP. However, a crucial element of that finding had been the fact that every employee was treated the same, and the difference in treatment complained of was only established by comparing the situation that existed prior to the change of bonus policy with the situation afterwards. In the instant case, the requirement to enter into new terms and conditions was a provision or a practice, it had been applied to persons who did not share the relevant characteristic, and when applied to the claimants and others in their age group it put them at a particular disadvantage because the new terms meant working longer hours, with inferior benefits. Thus, the tribunal had been entitled to conclude that there was a PCP which would be indirectly discriminatory if it could not be objectively justified.
Turning to that question of justification, the EAT held that the tribunal had correctly directed itself as to the applicable law; had properly considered the alternative options available to the employer before concluding that none of them would have achieved the necessary cost savings nor addressed the anomalies in terms and conditions; and had carried out the necessary balancing exercise between the needs of the employer and the discriminatory effect on the claimants. Accordingly, the finding that the PCP was objectively justified was upheld.