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Bank Director – Age Discrimination Ruling

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

Redundancy is a potentially fair reason for dismissal, but it may be found to be unfair – for example if a particular employee is unfairly selected for redundancy. Conversely, where voluntary redundancy is on offer, employers must take care not to exclude someone for reasons that are discriminatory.

In Donkor v The Royal Bank of Scotland, a senior bank employee claimed that he was not offered voluntary redundancy purely because of his age and that this constituted direct age discrimination.

Mr Donkor, who was aged over 50, was one of four regional directors of the bank whose jobs were initially identified as at risk of redundancy following a restructuring exercise. Two of them, who were aged under 50, were given the option to take voluntary redundancy but he was granted no such opportunity. An Employment Tribunal (ET) nevertheless rejected his age discrimination claim on the basis that his position was not fairly comparable with that of his two younger colleagues.

The ET noted that, because of his age, voluntary redundancy would also result in an entitlement to a non-discounted pension and that the total cost of dispensing with his services would have exceeded £500,000. Such a severance package gave rise to particular legal risks and required authorisation by the bank’s senior management. Those difficulties would not have arisen in relation to his younger colleagues and the cost of making them redundant would have been substantially lower.

In upholding Mr Donkor’s challenge to the ET’s decision, however, the Employment Appeal Tribunal (EAT) found that the chance to take voluntary redundancy was a benefit that had been denied to him simply because of his age. The ET had erred in its approach to the question of comparison. Its starting point had been to deny the appropriateness of the comparison between Mr Donkor and his colleagues because of the material difference arising from the fact that voluntary redundancy would enable him to obtain early retirement benefits, which it would not for his comparators. The difference between him and his colleagues as identified by the ET was in reality simply that of age. That was precisely his complaint and could not be relied upon as a material difference for the purpose of comparison.

The EAT found on the evidence that Mr Donkor had been less favourably treated and that he had, on the face of it, established that he was a victim of age discrimination.

The case was sent back to the same ET for consideration as to whether his treatment was nevertheless justified in the particular circumstances of the case.

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