Age Discrimination - Guidance on objective justification

An employer will have a defence to a claim of age discrimination if they can prove that the discrimination could be justified on objective grounds. Age discrimination is unique because this defence even applies to accusations of direct discrimination.

In Bloxham v Freshfields Bruckhaus Deringer an Employment Tribunal dismissed claims of direct and indirect age discrimination because Freshfields were able to objectively justify their treatment of the claimant.
Mr Bloxham's was a former partner of the firm whose case centred around changes that Freshfields made to their pension plan in May 2006. The reason for this restructuring was to reduce the "intergenerational unfairness", whereby younger partners would contribute more, but would suffer the prospect of receiving smaller and smaller pensions when they came to retire. The future plan was to be less generous but those partners who were close to the retirement age of 55 were offered a transitional arrangement.

Mr Bloxham accepted this transitional provision when he decided to retire from Freshfields early at 54 and as a result suffered a 20% reduction to the benefits under his pension. He argued in the Tribunal that the 20% discount constituted age discrimination by the firm.

The Tribunal accepted that Mr Bloxham had been treated less favourably on the grounds of his age. Had he been 55 when he chose to retire he would not have suffered any deduction in his pension. Mr Bloxham's claim failed though because the Tribunal found that Freshfields treatment of Mr Bloxham was justified. The general aim of reforming the scheme was to provide a more sustainable alternative. Freshfields treatment of Mr Bloxham was therefore deemed a proportionate means of achieving a legitimate aim.

The Tribunal commented that Freshfields' extensive consultation process (which included a two-thirds approval vote from the firm's partners, extensive legal advice and consideration of a variety of alternative options) was a significant factor leading to the Tribunal's decision.

Employers should be advised that in order to rely on the objectively justifiable defence they will need to show a clear paper trail setting out the analysis that has gone into introducing a policy that may be discriminatory to certain groups within an organisation. It will be important to show that consideration has been given to other alternatives, including less discriminatory ones, before any changes are implemented.