Are you discriminating against men? Rutherford v Towncircle Limited and DTI

An Employment Tribunal decision indicates that pension schemes which do not provide benefits in respect of service after normal retirement age could potentially be guilty of sex discrimination.

Background

Mr Rutherford and Mr Bently were both aged over 65 when they were dismissed by their employer. Before the Employment Tribunal, both men claimed that they were entitled to statutory redundancy payment. Mr Rutherford also claimed that he should receive compensation for unfair dismissal. A major obstacle for the two men lay in the fact that the Employment Rights Act 1996 (ERA) provides that workers who are 65 or over when they are dismissed have no entitlement to a statutory redundancy payment and cannot generally make a claim against their employer for unfair dismissal.

The Tribunal heard evidence that statistically more men than women cease employment after the age of 65. As a result of this, the men claimed, the inability to make a claim of unfair dismissal and the lack of entitlement to a statutory redundancy payment after age 65, prejudiced more men than women. Consequently, they argued, the provisions of the ERA were indirectly discriminating against men, and contrary to European Law. The Tribunal accepted this argument and allowed the claims to be pursued.

What does this mean for pension schemes?

The decision of the Tribunal indicates that rules, whether statutory or otherwise, which result in employees over normal retirement age (NRA) being treated less favourably than employees under NRA, could be discriminatory if those rules disproportionately affect employees of a particular sex. On this basis, the Tribunal's decision could be used to justify claims that pension schemes which do not provide benefits in respect of service after NRA are guilty of sex discrimination if there are substantially more members of one sex who continue with an employer after NRA.

At present this is only a decision at tribunal level, which means that it is not binding on other tribunals or the courts. In addition, there are as yet no clear indicators that the decision will change the requirements for pension schemes.

The Department of Trade and Industry (DTI), which was a party in the case, has announced that it will appeal the decision.