mfg Blog

News and Events

Director over 50 claims age discrimination when denied voluntary redundancy

  • Posted

The recent case of Donkor v Royal Bank of Scotland involved a director denied the opportunity to apply for voluntary redundancy as this would have entitled him to claim enhanced retirement benefits of more than £500,000.

Given these benefits were only available to employees over 50, the Employment Appeal Tribunal had to decide whether preventing him applying for redundancy was unlawful age discrimination..

Under the Equality Act 2010, claimants need to show the circumstances of a real or hypothetical comparator are not materially different from their own.

In this case Mr Donkor was employed as a regional director for the Royal Bank of Scotland (RBS), and made a claim for discrimination as a result of RBS’ failure to consider him for voluntary redundancy.

In 2012 RBS started a preliminary restructuring of its staff and began by selecting staff who would be interviewed for a new role under the new structure and who would be given the option to apply for voluntary redundancy. Those employees over 50 who were not given an interview could also elect to take early retirement.

Four regional directors were not selected for interview including Mr Donkor. Two of these were under the age of 50 and applied for and were given voluntary redundancy. Two of the directors, including Mr Donkor, were over 50 and were not given voluntary redundancy due to the high costs involved.

As an alternative RBS offered Mr Donkor and his colleague the chance to apply for an alternative role, and informed them that they could not apply for voluntary redundancy while a new role was available.

The claimant then, following a further restructuring in 2013, was invited to take voluntary redundancy. But by this point the pension rules for RBS had changed, which raised the minimum age at which those opting for voluntary redundancy could receive a non-discounted pension from 50 to 55. The claimant no longer qualified (as he was younger than 55 at the time).

The Employment Tribunal initially held that RBS had not discriminated against the claimant on the basis of the claimant’s age by deciding not to invite him to apply for voluntary redundancy in 2012.

But the Employment Appeal Tribunal overturned this decision. The fact that the employer’s severance costs for Donkor were higher was a direct result of his age. As such, if the reason he was not able to apply for voluntary redundancy in the first restructuring was his eligibility for enhanced retirement benefits, this in itself was direct discrimination on the grounds of age.

The EAT remitted the case to the tribunal to see if there was evidence to show the employer’s actions were objectively justified.