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10 May 2013

Lower severance payment for younger employee objectively justified

An employer has objectively justified paying a younger worker less severance pay than older workers on redundancy because of the proportionately greater problems for older workers in getting a new job.

In Lockwood v Department of Work & Pensions & Anor, a 26-year old civil servant accepted voluntary redundancy and received severance pay of almost £11k. If she had been over 35 she would have received around £28k. She claimed direct age discrimination, using over-35s as comparators.

Her claim failed. The Employment Appeal Tribunal agreed with the Employment Tribunal that under-35s and over-35s were not proper comparators because older employees would suffer more as a result of losing their jobs than younger employees. Even if they had been proper comparators, the fact that the employer had tried to provide a proportionate financial cushion for the older workers until they could find new jobs, because getting new jobs would take them longer, was objectively justified as a proportionate means of achieving a legitimate aim.

Employment law associate Chris Brazier recommends: "Employers awarding different severance payments to workers according to their ages must ensure they can produce evidence that this is a proportionate means of achieving a legitimate aim or risk age discrimination claims."

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