DISCRIMINATION — Sex — Employment — Employees over 65 at time of dismissal — Applications for redundancy payments and complaints of unfair dismissal precluded by domestic legislation — More men than women in employment after age 65 — Whether legislation discriminating against men — Employment Rights Act 1996, ss 109(1)(b), 156(1)(b) — EC Treaty, art 141 — Council Directive 97/80/EC, art 2

Secretary of State for Trade and Industry v Rutherford (No 2);
Same v Bentley [2006] UKHL 19

HL(E): Lord Nicholls of Birkenhead, Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond: 3 May 2006

There was no sex discrimination within art 141 of the EC Treaty where statutory provisions denying the right to compensation for unfair dismissal and redundancy pay to those over 65 applied to the same proportion of women still in employment after that age as of men.

The House of Lords so held in dismissing an appeal by the applicants, John Denis Rutherford and Samuel Bentley, from the decision of the Court of Appeal (Potter, Mummery and Scott Baker LJJ) [2005] ICR 119 dismissing their appeal from the Employment Appeal Tribunal, which had allowed an appeal by the Secretary of State for Trade and Industry from the decision of an employment tribunal that it had jurisdiction to entertain the applicants’ complaints and upholding them. The applicants had been dismissed by their respective employers when they were over 65.

LORD NICHOLLS OF BIRKENHEAD said that although the facts seemed to give rise in principle to an issue of indirect sex discrimination, the applicants’ claim foundered at an early stage. The percentage of employees not adversely affected by the cut-off age (in ss 109(1)(b) and 156(1)(b) of the Employment Rights Act 1996) was about 988%. In the make-up of that group there was virtually nothing to choose between men (986%) and women (990%). The percentage of employees adversely affected comprised 12% of the workforce, where the split between men and women was 14% men and 10% women. In the context of a national scheme applicable to both men and women in a workforce of over 26 million, a ratio of 14:1 was insufficient to establish the necessary degree of disparate impact.

LORD SCOTT OF FOSCOTE said that he would dismiss the appeal on essentially the same line of reasoning as that of Lord Rodger and Baroness Hale.

LORD RODGER OF EARLSFERRY said that the woman over 65 was the appropriate comparator for a man over 65. The applicants were not receiving less by way of pay than any woman over 65 received or would have received for equal work, nor would any woman over 65 have had the rights denied to the applicants.

LORD WALKER OF GESTINGTHORPE said that the proper pool for comparison in considering disparate impact (Council Directive 97/80/EC, art 2(2)) was in principle all employed persons on whom rights were conferred by the 1996 Act. An advantage-led approach was preferable to an disadvantage-led approach, and a proportion of disadvantage of 144:1 was not such as to make it necessary to resile from the absence of any significant disparity (1:1004) in the advantaged groups.

BARONESS HALE OF RICHMOND said that for reasons essentially the same as those of Lord Scott and Lord Rodger she would dismiss the appeal.

Appearances: Robin Allen QC, Rachel Crasnow and Paul Troop (Linklaters and Islington Law Centre) for the applicants; David Pannick QC, Melanie Hall QC and Kassie Smith for the Secretary of State.

Reported by: Michael Gardner, barrister