Dismissal to avoid pension liability valid in Woodcock v Cumbria Primary Care Trust

Mr Woodcock was the Chief Executive of the North Cumbria PCT and was made redundant when it was merged with another Trust. He claimed that the way in which he had been dismissed amounted to unlawful age discrimination because he was given notice to expire about one month before his 50th birthday, when he would have become entitled to an enhanced pension. The additional cost of that pension would have been between £500,000 and £1,000,000 which the PCT was anxious to avoid.

It is well established that cost alone can never justify age discrimination. Cost is one of the factors that can be put into the balance with others, and an employer will have to show that the treatment complained of was a proportionate means of achieving a legitimate aim. In the particular circumstances of Mr Woodcock’s case, it was found that the PCT was not just motivated to save costs, even though the notice of termination given by the PCT was clearly timed to expire before he reached his 50th birthday. However, Mr Woodcock, was geneuinely redundant, the PCT had treated him very generously and he had been given a much longer reprieve from dismissal than he might have expected. In addition, he had no legimitate expectation of the enhanced pension which would have been an undeserved windfall.

This type of case turns on its own facts, and an employer needs to be very careful if it wants to dismiss an older employee where the decision would seem to be motivated simply by the need to save costs.

For more information, please contact Stephen Morrall