In the recent case of Heron v Sefton Metropolitan Borough Council the Employment Appeal Tribunal (EAT) held that an employer could not rely on the statutory authority defence in an age discrimination claim where the employee received a smaller enhanced redundancy package than her younger colleagues.
Under the Equality Act 2010 (the Act) it is unlawful to directly discriminate against someone on the grounds of their age unless there is justification. A statutory authority defence exists where the employer’s discriminatory act is something required by an enactment including an Act of Parliament and subordinate legislation. The statutory provision relied on by the employer must do more than just permit the discrimination: rather it must have been necessary for the employer to have discriminated so as to avoid breaching the provision.
Ms Heron worked for Sefton Metropolitan Borough Council (the Council). She had transferred her employment to the Council pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) from her previous employer, Learning Skills Council (LSC), after ten and a half years of continuous service.
LSC had operated a scheme called the Civil Service Compensation Scheme 1994 (the Scheme) which met the definition of an enactment under the Act. The Scheme provided for one month’s gross pay as redundancy pay for each year of service. This amount was then halved after the employee reached the age of 60. On the transfer of Ms Heron’s employment to the Council she was still contractually entitled to the benefit from the Scheme in the event of dismissal by redundancy. Mrs Heron was made redundant by the Council at the age of 61. She received six months pay in accordance with the Scheme. She brought a claim for direct age discrimination.
The Council sought to rely on the statutory authority defence and, in the alternative, argued that paying an employee who had reached state pension age less than others was a proportionate means of achieving a legitimate aim and so was justified.
It was held that the statutory authority defence did not apply for the following reasons:
1. the enactment did not require different treatment of employees over the age of 60, it merely provided for it; and
2. when the terms of the Scheme transferred to Ms Heron’s employment with the Council under TUPE, they were no longer statutory and instead became contractual, therefore it was not within the statutory authority exception. Further it was held that there was not sufficient evidence to show a legitimate aim.