In Donkor v RBS the EAT considered whether a employer who refused to allow an employee in his 50s to take voluntary redundancy because of the substantially increased cost of the early retirement element of his package had discriminated against the employee because of his age.

Facts

Mr Donkor worked for Royal Bank of Scotland as a Regional Director.

In 2012, Mr Donkor was informed that he was at risk of redundancy and told that anyone who was at risk had the option to volunteer for redundancy. It was also confirmed that if the person at risk was aged over 50, there would also be an option to take early retirement.

Mr Donkor volunteered to take redundancy and because he was over 50 he also opted for early retirement, which increased the value of his severance payment to over £500,000. RBS took one look at the headline figure and changed its mind. Mr Donkor was informed that he had the opportunity to apply for an alternative role and he did not have the option of voluntary redundancy while this role was on offer. Mr Donkor applied for and was appointed to the role. Two Regional Directors under 50 applied for and were given voluntary redundancy. In 2013 there was a further restructuring, as part of which Mr Donkor applied successfully for voluntary redundancy. However, the pension scheme rules had been changed and only those aged over 55 were entitled to early retirement benefits so Mr Donkor lost out again.

Mr Donkor brought a tribunal claim arguing that the decision not to allow him to apply for voluntary redundancy in the 2012 restructure was an act of direct age discrimination.

Employment Tribunal decision    

The Tribunal held that there were material differences between Mr Donker’s circumstances and those of his chosen comparators (employees under 50) in respect of the benefits to which they would be entitled if they applied for voluntary redundancy. On this basis they did not consider those under 50 to be appropriate comparators for Mr Donker’s claim. The Tribunal also held that in any event, Mr Donker was not less favourably treated than his younger comparators because neither he nor they were given the option to apply for voluntary early retirement.

As a final nail in the coffin, it was also found that even if the failure to offer voluntary redundancy did amount to less favourable treatment, it was not on the basis of age but because of the substantial cost to the Company.

Mr Donkor appealed to the EAT.    

EAT Decision

The EAT allowed the appeal and found the Tribunal had erred in its approach to the question of comparison. The material difference identified was one of age, and since this was precisely Mr Donker’s complaint, it could not be relied upon as a material difference. Therefore Mr Donker was able to compare his treatment with the two employees who were aged under 50. Since the extra cost to RBS was a direct result of the employee’s age, it was therefore potentially direct discrimination for the employer to have taken it into account.

The EAT held that a legitimate case for direct age discrimination had been made. 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 as a proportionate means of achieving a legitimate aim.