THE COSTLY PRICE OF DISCRIMINATION

Is an employee, who is excluded from a voluntary severance scheme on discriminatory grounds, entitled to receive the full amount of severance despite the fact she kept working for her employer? We report on the case of HM Land Registry v McGlue.

FACTS
The employer decided to offer an “early release” scheme but decided to exclude applications from employees on a career break not due to return to work until after March 2010. The Claimant had been on a career break since March 2008 and was entitled to remain off work for up to five years. She applied for early release but was told that she was excluded. However, her employer failed to tell her that if she gave notice to return to work before April 2010, she would be eligible for consideration. She raised a grievance, which was rejected, and an appeal, which was also rejected. She brought, among other claims, a claim of indirect sex discrimination.

DECISION
The Employment Tribunal found that HMLR’s policy of excluding employees on career breaks from the voluntary severance scheme was indirectly discriminatory and was not justified. It therefore awarded her £12,000 in respect of injury to feelings; £5,000 in aggravated damages; and compensation for economic loss of £71,710.

Why was the Claimant awarded £71,710 for economic loss?

£71,710 was the sum of money she would have received under the early release scheme. The evidence before the Employment Tribunal was that she would have been successful in her application had she been allowed to be considered.

As the Claimant continued to work for HMLR, any monies paid in salary or future salary should be discounted from the amount of severance?

The employer argued that the early release payment was intended as a redundancy payment and as the Claimant remained in employment and was not redundant, any compensation should be set off against her future earnings. However, the Claimant’s evidence was that, had she been accepted under the early release scheme, she would have taken the £71,710 and found another job elsewhere that paid the same as her current role.

The EAT preferred the argument of the Claimant. The starting point had to be that had the Claimant not been discriminated against she would have been accepted into the early release scheme and would have been £71,710 better off. What she did thereafter was her choice. There was nothing to stop the Claimant from finding a similar paid job and her evidence to this went unchallenged by HMLR. Therefore there was no basis to set-off any of the severance payment.

The EAT also rejected HMLR’s appeal against the amount of the injury to feelings award but allowed its appeal against the award of aggravated damages, holding that there was no basis for such an award.

COMMENT
This case serves as reminder – albeit an expensive one - to employers to check that the terms or rules relating to a voluntary severance scheme are not discriminatory and that those on a career break are not be placed at a disadvantage. Employers should also be careful of using service criteria as this may have age discrimination implications. Criteria should be capable of objective justification if any disadvantage is caused.