The recent case of HM Land Registry v Benson looked at a cost-based voluntary redundancy situation and whether or not this resulted in indirect discrimination on the grounds of age and sex.  Jodie Sinclair has reviewed this case in detail to assess whether or not such discrimination can be justified and if so, on what grounds.


In 2008 HM Land Registry (the ‘Registry’) began a programme of voluntary redundancy and early retirement and set aside £50million from its reserve for this.  The programme only used up £38million of this reserve and so they initiated a further programme for merging 3 pairs of offices, using the £12million remaining of the reserve to achieve this.

Under the merger programme the Registry invited employees to do the following:

  • if aged over 50, to apply for compulsory early retirement; and 
  • if aged under 50,  to apply for compulsory early severance under the Civil Service Compensation Scheme (‘CSCS’).

It was made clear not all applications would be accepted, based on the limited funding available (£12million).

More applications were received than could be processed within the budget, and so a decision was taken to accept applications from those employees whose CSCS entitlements would cost the least and to not accept applications from employees on career breaks who were not expected to return until after 31 March 2010.

6 employees brought tribunal claims against the Registry:

  • Claimants 1 to 5 (who were aged between 50 and 54) argued that they had been indirectly discriminated against on grounds of age, on the basis that the decision to accept the ‘cheaper’ applications excluded them as their benefits were higher given their age; and
  • Claimant 6 argued that she had been indirectly discriminated against on grounds of sex by the career break decision.

Employment Tribunal judgment

The ET upheld the claims of all claimants.

Age discrimination (Claimants 1 to 5)

They held that the ‘cheaper’ criteria was a provision, criterion or practice (‘PCP’) which put employees in the Claimants' age group at a particular disadvantage compared with other employees who applied.

The EAT accepted that the criteria used was the only practicable one available but that the additional sum necessary to release everyone who had applied (£19.7million) could have been incurred by the Registry and therefore the PCP followed was not a proportionate way for them to achieve their aim.

Sex Discrimination (Claimant 6)

It was accepted that the PCP applied to Claimant 6 was that, in order to be considered under the merger programme, employees on a career break had to be due to return to work before 1 April 2010. This put women at a particular disadvantage when compared with men because women took proportionately longer career breaks than men. While that was capable, in principle, of being justified, the ET found that the failure to notify Claimant 6 was unfair because the 1 April 2010 date had not been properly communicated to her and her break was due to continue until 30 March 2013. She argued that by not knowing the relevant date, she was deprived of the opportunity to return to work accordingly, which meant that the application of the criterion to her could not be relied on as proportionate.

The Registry appealed to the EAT.

Employment Appeal judgment

The EAT allowed the Registry’s appeal regarding the age discrimination finding but dismissed the appeal in regards to the sex discrimination claim.

Age discrimination (Claimants 1 to 5)

The EA agreed that the PCP was accepting the ‘cheapest’ applications (“the Cheapness Criterion”) but held that the Registry could have a legitimate aim in either reducing the number of applicants at a cost within the £12millio budget, or reducing the headcount so costs did not exceed its revenue.

It was held that the test should not simply be whether the money was available to the employer and instead the court should have regard to the employer’s ‘legitimate aim’.  This was defined as being the employer’s decision “about how to allocate [his] resources, and specifically his financial resources…..even if it is shown that he could have afforded to make a different allocation with a lesser impact on the class of employee in question".

The EAT then held that the ET’s finding that the only satisfactory method of selection had been to take account of the cost of releasing applicants meant that the PCP (the Cheapness Criterion) was therefore justified. 

Sex Discrimination (Claimant 6)

The EAT agreed that the exclusion of employees on career breaks had a disproportionate impact on female employees. But it also indicated that this might be justified on the basis the Registry was entitled to adopt reasonable criteria for deciding who 'counted' for the purposes of the merger.

However, the crux here was that as those on career breaks remained employees and could return on reasonable notice, discounting them would be unfair. Therefore as the criterion was held to be unfair (which was a legitimate decision for the ET to have made) it could then not be regarded as proportionate or relied on by way of justification.

What does this mean for me?

In this case the £12million budget was specifically set aside for a particular project (the redundancy programme).  This project was not directly discriminatory, but, as it turned out, did require a selection exercise that could only practicably be done on an indirectly age discriminatory basis.  In other words the Registry has no real alternative to using the Cheapness Criterion.

This is potentially very helpful as it suggests that cost alone could justify indirectly discriminatory PCPs, along the lines of the EAT’s decision in Woodcock (which was discussed in our November 2010 edition.  However the EAT in Benson, whilst accepting the ET had found the Registry had no alternative but to use the Cheapness Criterion, did not think that conclusion was inevitable.

Therefore, this decision must be relied on with some caution when looking at whether a PCP is discriminatory on the grounds of age; the EAT made it clear that this decision does not mean that use of a similarly discriminatory criterion will necessarily be justified in other cases, where evidence may produce a different result.

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