Swann v GHL - tribunal finds flexible benefits are not age discriminatory

Employers and HR directors should be relieved at a tribunal decision clarifying the issue of age discrimination in employee benefits packages. In the case of Swann v GHL Insurance Services, the employment tribunal found that a flexible benefits fund was not discriminatory on the grounds of age, even if the individual components were age related.

Richard Lee, partner and head of Wragge & Co's Combined Human Resource Solutions (CHRS) team said: "Many employers offer health and life insurance as part of their benefits programme, so this ruling provides clarification on a contentious issue. This is only a tribunal decision, so employers must be vigilant and monitor future developments."

In Swann v GHL Insurance Services, Swann claimed she had been unfairly treated by her employer. Her private medical insurance premium, under a newly introduced benefits package, was higher than that of her younger colleagues. Having sought professional advice GHL introduced the new package in the belief it would aid the retention and recruitment of staff.

The tribunal rejected the claimant's argument and found that it was standard practice for premiums to be calculated based on age and gender. The majority further found that even if the package had amounted to discrimination on the grounds of age, it was a consequence of the employer attempting to achieve a legitimate business aim.

Liz Wood, a solicitor in Wragge & Co's CHRS team said: "This case demonstrates the importance of being able to justify objectively a scheme with a business case, which will offer some protection in the event of a tribunal. The majority gave significant weight to the fact that GHL sought professional advice before implementation of the new scheme, which is undoubtedly essential."

Wragge & Co's five-lawyer CHRS team provides a complete HR, pensions and employment solution to 21st century organisations. With expertise in discrimination claims, TUPE, flexible benefits, part-timer claims, absence management, flexible retirement, scheme restructuring, final salary pension scheme debt management, employee education and communication, recruitment, reward and incentives, the team advises on all the practical and legal challenges facing employers. Clients include HSBC, University of Nottingham, Toyota, Emap, Steria, Sanctuary Housing Association, Cemex UK, CB Richard Ellis and NIAB.

The CHRS team is part of Wragge & Co's 75-lawyer Human Resources group. The group is home to the FT Business Pensions and Investment Provider Awards law firm of the year as well as a national employment practice.