This case involved an employer whose attempts to reduce the risk of a claim backfired.
Shortly before the Regulations came into force, it realised that its contractual arrangement to pay enhanced bonus rates to those who were over 50 was probably discriminatory.
It therefore terminated the contracts of employment of employees who had reached the age of 50 and offered them new terms without the enhanced bonus rates. The employees successfully claimed age discrimination, as younger staff (whose contracts also contained the right to an enhanced bonus) were not dismissed and re-engaged.
The tribunal found that the employer’s decision to dismiss and re-engage was not a proportionate way of achieving a legitimate aim in the absence of any attempt to consult the workforce and achieve a negotiated solution to the problem.
For other employers seeking to amend benefit structures, the message from this decision seems to be “act in haste, repent at leisure”.
Sharma v Millbrook Beds Ltd (25.10.07, ET case no.3100922/07)