Can cost savings be used to justify early retirement?

Was the police force allowed to retire a large number of its officers early to save costs?

No, according to an Employment Tribunal in the recent case of Harrod v Midlands Police.

Background

In order to meet the government’s budget cuts of 20% over 4 years, many police forces decided to use a statutory provision allowing them to force early retirement on officers who had long service (regulation A19).

The legal issue

Using the statutory role to force early retirement on those with long service amounts to indirect age discrimination because it adversely affects older officers more than younger ones. Indirect discrimination can be excused if it is ‘justified’ on the basis that there is a legitimate aim for the requirement, which goes no further than is necessary.

In this test case the indirect discrimination could not be justified. Although it met the legitimate aims of costs saving and, as the police put it, efficiency, they had not given adequate consideration to the alternatives, and whether officers would have retired anyway. The Tribunal said that they should have asked for volunteers and considered part-time working and career breaks to reduce numbers and save costs.

Implications for businesses

This is only an Employment Tribunal decision, and is likely to be appealed many time yet, given the number of officers involved.

However, the reasoning of the Tribunal provides a very useful reminder to businesses that are considering taking any action that is indirectly discriminatory (i.e. that has a disproportionate effect on people in the protected categories of sex, race, age, disability etc.). They should always make sure their aims are clear and proper, and that they have considered alternative ways of achieving these aims. A Tribunal will want to see that the business has taken the least discriminatory route, and, ideally, a paper trail. 

If you have an issue like this, we are experts in the field, and would be delighted to discuss it with you.

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