Employment & HR - colourful people chain image

42 year old wins age discrimination claim

A 42 year old employee has recently won an age discrimination claim against his former employers. Mr Beck was dismissed from his well paid role as Head of Marketing at the Canadian Imperial Bank of Commerce in London, aged 42, following what the tribunal described as a “sham” redundancy process. In reality the Bank had decided to get rid of Mr Beck and appoint a “younger” individual with an “entrepreneurial profile”. Mr Beck succeeded with his claim, despite evidence that all of the shortlisted candidates to replace him were 40 or over, with the preferred candidate being 50 because the tribunal believed that the decision to dismiss was, in the absence of any other convincing explanation, motivated by Mr Beck’s age.

Mr Beck was employed by the Bank from January 2007. He did not get on with a newly appointed manager and they had a number of disagreements. As a result of the well documented problems in the financial sector in 2007/8 the company (relying on the views of Mr Beck’s manager that he was not “high quality”) decided to restructure the marketing department and to make Mr Beck “redundant”. At the same time it was determined to look for another key individual to head up the marketing department. It put him “at risk”, sent him home immediately and later confirmed that he had been made redundant.

The tribunal found that there was no genuine redundancy situation. A decision had been made to replace Mr Beck before he was put at risk. He met all of the attributes sought by the Bank for the new role (which had been set out in an internal memo) except for the requirement to be “younger”. Unsurprisingly, the tribunal asked the Bank to explain why it had included the word “younger”, particularly as its own HR manager had said that the word was “inappropriate”. The tribunal found that the striking use of that word was enough to shift the burden of proof to the Bank. This meant that the Bank had to show that it was more probable than not that Mr Beck’s dismissal was unrelated to his age.

The Bank did little to help itself. It failed to call a key witness and had been evasive about disclosing the memo. This diminished its credibility. The tribunal did not accept the Company’s argument that the word younger meant someone “less senior” who would cost the business less to employ. It was also irrelevant that Mr Beck had been 41 when he was hired because different people had been involved in the decision to employ him. Nor did it accept that because the Bank was apparently willing to recruit older workers into the new marketing role (although no-one had in fact been appointed), this indicated that the decision to dismiss Mr Beck was unmotivated by his age. The key issue was what influenced the decision to dismiss at the time the dismissal took place and the Bank had no convincing evidence to answer this.

The cost to the employer will be significant. Mr Beck’s basic salary was £125k and he was entitled to a guaranteed minimum bonus of £775k. Whilst his successful unfair dismissal claim will be capped, his claims for discrimination will not be. Mr Beck was also awarded 90 days pay in respect of the company’s complete failure to comply with the collective redundancy procedures.

Implications for employers

Employment tribunal decisions do not create precedents. However, this case provides a salutary warning to employers about the risk to their credibility if evidence emerges which contradicts their pleaded case. Employers who come to a tribunal hearing unable to lead evidence on the reason why an employee has been dismissed or treated differently will always be at risk of a finding of age discrimination.

Here reference to requiring a “younger” employee was put in writing and included in a description of required attributes. Most employers would avoid this type of wording in advertisements etc. However care needs to be taken to ensure that internal communications (particularly emails) do not contain discriminatory opinions as these documents are disclosable in the event of a claim being issued. This will make it much more difficult for an employer to argue that its decision was not motivated by age.