International Employment Lawyer
“The main take away from this case is that employers should use objective selection criteria which does not have an unlawful discriminatory effect when deciding who to select for redundancy,” says Littler’s Caroline Baker.
“In this case there is a suggestion that more competent, but more expensive employees may have been selected for redundancy over less competent, but less expensive employees. Whilst cost can be a factor in selecting employees for redundancies, it should not be the only factor that is considered,” she adds.
“If the employer simply picked on the basis of the cost of the employee, and this impacted more older employees – as it is usual for older employees to be paid more than younger employees due to experience and skillset – then this is likely to be unlawful indirect age discrimination.”
Even if Virgin did not intentionally discriminate against its older employees, Baker stresses that indirect discrimination is still a big threat throughout redundancy processes.
“If the consultation process is done properly, issues with the criteria are often flagged to the employer and changes can be made before the selection process is completed. However, where criteria are indirectly discriminatory, the effect can be subtle and may not be detected until reviewed by a lawyer after the event,” she notes.
“It is not automatically unlawful to use criteria which has an indirectly discriminatory effect; however, such use is only lawful if it is a proportionate means of achieving a legitimate aim.
“In practice, the question that an employer should be asking itself is, ‘is there an alternative, less discriminatory way we can achieve the same goal’ or ‘can we use an alternative criterion that doesn’t have a discriminatory impact’. Cost alone cannot be the sole legitimate aim, but it can be considered in amongst other aims.”
