Does the presence of age-related pension benefits mean you can treat over 50s differently?

The recent EAT case, Donkor v Royal Bank of Scotland considered whether an employee over 50, who stood to gain from early retirement benefits that were only available to over 50s, could not compare his treatment in relation to redundancy to that of an employee under 50.
In the Donkor case, during a restructure in 2012 Mr Donkor missed out on voluntary redundancy due to the cost involved of having to offer him access to his early retirement pension benefits.
The EAT found that

  • there was less favourable treatment because Mr Donkor’s younger colleagues had been given the opportunity to apply for voluntary redundancy, where Mr Donkor had not.
  • being eligible for early retirement benefits was a consequence of age, and therefore the main reason for the detrimental treatment was age.

Therefore the EAT held that:

  • the Tribunal was incorrect to find that the regional directors under 50 were not appropriate comparators as there was no material difference in their circumstances apart from age.
  • there was no need to enquire why an employee was treated differently, merely whether the employee was treated differently on the grounds of age.

What does this mean for employers?
This case is warning that where the enhanced pension cost is directly linked to the employee’s age, the age link makes a younger employee a valid comparator in discrimination cases.
It is important that in making decisions, an employer does not base it solely on a protected characteristic, i.e. age, and can sufficiently justify their actions.