Relevant law

The Equality Act (Age Exceptions for Pensions Schemes) Order 2010 allows an employer to provide enhanced redundancy benefits to those who have reached a specified minimum age, and to provide such a person with a pension which, though offered early, is not actuarially reduced. It is not unlawful discrimination to provide that an early pension may be offered without actuarial reduction, though the minimum age at which such a scheme can be offered is set at 50 by the Finance Act 2004.


The Royal Bank of Scotland (“RBS”) operated a pension scheme. It provided that employees could in appropriate circumstances be offered voluntary early retirement terms which included the payment of a pension at age 50 without any actuarial reduction. The scheme was to be changed so that such a benefit would now only be open to those aged 55 or more.

Separately, Ms Palmer (aged 49) was told she was to be made redundant as part of a collective redundancy exercise. She, along with all others selected for redundancy, was offered two options: either redundancy or redeployment. Those who were selected for redundancy and who would be aged over 50 at the date of their projected dismissal were subsequently offered the chance to change their choice and choose a third option: early retirement. As Ms Palmer would not be aged over 50 at the date of her projected dismissal, she was offered neither a chance to change her mind nor early retirement.

Ms Palmer sought to change her choice from voluntary redundancy to redeployment, in the hope that the redeployment process would take long enough that she would reach the age of 50 and so become entitled to early retirement. RBS did not give Ms Palmer the chance to change her choice. Ms Palmer complained it was unfair to give those who would be over 50 at their projected date of dismissal a further choice.

Ms Palmer argued that RBS’s failure to offer her the chance to change her choice of option from voluntary redundancy to redeployment was direct discrimination on the ground of age (Ms Palmer did not argue that offering early retirement to those aged over 55 was age discrimination).

Ms Palmer’s claim was dismissed. The Employment Tribunal found that Ms Palmer did not identify an appropriate comparator and, in any event, the discrimination would have been justified.

Ms Palmer appealed to the EAT.


The EAT dismissed Ms Palmer’s appeal.

The EAT held that the Employment Tribunal had correctly decided that less favourable treatment had not been established.

The Employment Tribunal had held that there was a material difference in the circumstances of Ms Palmer and those she sought to compare herself with. Those in the putative comparator group would have changed their choice from voluntary redundancy to early retirement. Ms Palmer, however, would have changed it to redeployment.

The EAT referred to Lockwood and agreed with the Employment Tribunal’s analysis. Ms Palmer could not claim early retirement at the projected date of her dismissal. Her comparators could. Ms Palmer had two options available to her. Her comparators had three. They were in materially different circumstances which were not caused by unlawful discrimination on the ground of age, but by lawful discrimination which was required by statute.

The EAT’s ruling on the comparator issue was sufficient to dispose of Ms Palmer’s appeal. Nevertheless, the EAT ruled on the Employment Tribunal’s decision on justification.

The EAT referred to the cases of MacCulloch and Seldon (both the Supreme Court decision and the second EAT decision). The EAT agreed with the Employment Tribunal that RBS had a legitimate aim. Turning to proportionality, the EAT held that the Employment Tribunal had not expressly said why the scheme which excluded Ms Palmer from revisiting her options was proportionate. Regardless, the EAT said that it was reasonably clear why the Employment Tribunal thought that this was the case. The Employment Tribunal had considered the discriminatory effects of the rule and had dealt with the question of proportionality appropriately.

The judgment is available here.

Ms L Palmer v. The Royal Bank of Scotland PLC [2014] UKEAT 0083_14_0108