Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

In Air Products Plc v Cockram [2018] EWCA Civ 346, the Court of Appeal found that an employer’s rule restricting the right to take stock options on retirement to those aged 55 years or over amounted to objectively justified age discrimination on the basis that the aim of achieving consistency between members of the employer’s defined benefit (DB) and defined contribution (DC) pension schemes was a legitimate social policy aspect of intergenerational fairness and the rule was a proportionate means of achieving that aim.

The Court of Appeal maintained that the Employment Tribunal had therefore given a properly reasoned judgment which contained no error of law so that the Employment Appeals Tribunal should not have interfered with it. The appeal was allowed and the Court of Appeal restored the decision of the Employment Tribunal dismissing the complaint of age discrimination.

The factual background of Air Products Plc v Cockram

Mr Cockram (the Claimant) worked for Air Products plc (the Respondent) from August 1988 to July 2012, most recently in a senior position as Director of Business Information.

In May 2012, the Claimant  submitted a grievance regarding comments made by his line manager but the grievance was not upheld and, unhappy with the appeal outcome, the Claimant subsequently resigned from his employment citing fundamental breach of trust and confidence.

The Claimant made a claim to the Employment Tribunal claiming that he had been constructively unfairly dismissed, subjected to detriment by reason of protected disclosures and suffered age discrimination.

The Claimant’s age discrimination claim was based on Air Products’ Long Term Incentive Plan (“LTIP”), in which certain employees were offered stock options. The Claimant held “unvested options”, however, under the plan rules, these were forfeited when the employee left the company, except in certain defined situations: death, disability and retirement. Although the Claimant had retired, he did not fall within the retirement exception under the plan because for the purposes of the LTIP an employee had to retire on or after “customary retirement age” (55 or over) to fall within the exception and the Claimant had retired at age 50.

The Employment Tribunal dismissed all of the Claimant’s claims, but he appealed against the Tribunal’s rejection of his age discrimination claim to the Employment Appeal Tribunal (EAT) which allowed his appeal and remitted the case for re-hearing by a freshly constituted tribunal.

The decision of the Employment Tribunal

The Respondent accepted that the rule in the LTIP was directly discriminatory in that an employee who was over 55 years of age (unlike the Claimant) would have benefited from the retirement exception; however,  the issue between the parties was whether this discriminatory effect was objectively justified and was a proportionate means of achieving a legitimate aim.

The Respondent relied on three aims which it asserted to be legitimate aims — (1) intergenerational fairness and consistency with the aim of achieving consistency between the members of the employer’s DB pension scheme (who could retire at 50 years of age) and members of the employer’s DC pension scheme (who could not); (2) rewarding experience and loyalty; and (3) ensuring a mix of generations of staff so as to promote the exchange of experience and new ideas.

The Tribunal concluded that these were legitimate aims which met a real need, and that the discriminatory provision was appropriate to achieving the aims.

The decision of the EAT

The Employment Appeal Tribunal disagreed and found that the ET had erred in law by not giving a sufficient explanation as to why the Respondent’s  actions were a proportionate means of achieving a legitimate aim. The case was then taken to the Court of Appeal (CoA).

The decision of the CoA

The Claimant sought to argue that, in so far as the true aim of the minimum age of 55 to qualify for the retirement exception was to achieve consistency between the DB and DC schemes, this was not a social policy objective but an individual reasons “particular to the employer’s situation” without any social policy component.

The CoA  disagreed and held that steps taken in the employer’s best interests can also concurrently form the basis of a legitimate social policy. The Tribunal had been entitled to conclude that limiting the advantage enjoyed by one age group over another was a legitimate social policy. The plan provided a balance between acting as a retention tool to keep employees with the business until the age of 55 and being an incentive for retirement in order to create opportunities for younger employees.

The CoA added that 55 was a suitable age for employees to receive company benefits given that it was in line with minimum pension age. The Employment Tribunal was deemed entitled to find the provision proportionate and the EAT should not have interfered with the decision.  The Court of Appeal upheld the Employment Tribunal’s dismissal of the age discrimination complaint.

Our solicitors’ comments on Air Products Plc v Cockram

Caroline Lewis, a specialist employment solicitor at Redmans, commented on the case: “Direct age discrimination is the only type of direct discrimination which can potentially be objectively justified. The Court of Appeal has confirmed that it is open to an employer to objectively justify including ‘retirement’ as a good leaver reason in a long term incentive plan (LTIP) by reference to a specific retirement age even though doing so constitutes direct age discrimination as long as it is used to achieve a legitimate aim”.

The decision of the Court of Appeal in Air Products Plc v Cockram can be found here.

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

Our awards

Request a callback

Your first name (required)

Your last name (required)

Your email (required)

Your telephone number (required)

Brief details of your enquiry

Contact us

Please feel free to discuss your own position and concerns. Contact your nearest office on:

T: 020 3397 3603
E: enquiries@redmans.co.uk
W: www.redmans.co.uk

Testimonials

4.77 Average

205 Reviews

Gary P

All good advice, prompt and efficient

Posted 3 weeks ago

Anonymous

Excellent advice and customer service.

Posted 1 month ago

Aneet G

I would definitely recommend Redmans. Very impressed with service provided. They were extremely proactive in handling my case which made things easier for me. Provided sound advice and resolution. Special credit for this goes to Chris who dealt with my case with great determination and consideration.

Posted 2 months ago

Fern M

Very efficient and friendly

Posted 2 months ago

Neville S

A professional and friendly service, which I would highly recommend.

Posted 2 months ago

Daniel T

Extremely helpful and made a bad situation much more manageable. Where other solicitors seemed disinterested in my situation Redmans immediately made me feel like it was a team effort to achieve a more favourable outcome

Posted 2 months ago

Paul T

Excellent, quick and informative. Chris was a real star and gave me confidence during the uncertainty if a redundancy settlement.

Posted 2 months ago

Marina E

Felt in very capable hands was listened to and given excellent advice. Would not hesitate to recomend and use again if needed.

Posted 2 months ago

Rosa B

Fabulous service all round.

Posted 2 months ago

Anonymous

Redmans were quick to respond to my enquiry and dealt with my case professionally and personably. I received sound advice and was put at ease by Chris Hadrill, Partner.

Posted 2 months ago

Alkhas K

Excellent service.

Posted 2 months ago

Mathias G

Contacted them regarding my end of employment agreement. Chris Hadrill dealt with it and was done and handed back to employer same day more than happy with there service.

Posted 3 months ago

Mark W

Most professional from start to finish offering very a personal service. Most impressive and quick when dealing with the matters in hand.

Posted 4 months ago

Anonymous

Posted 4 months ago

submit

I am very glad I came across Redmans Solicitors. Fantastic service!

Posted 4 months ago

Anonymous

Fantastic communication, always happy to answer queries, highly recommended.

Posted 4 months ago

Wavenie B

They were very straight to the point, friendly and understanding people. I felt they had my best interest. They were easy to get hold of, replies were almost instant. 5/5 for customer service

Posted 4 months ago

Christina P

Caroline was fantastic to work with - extremely knowledgeable, supportive, thorough and honest. I definitely recommend Redmans!

Posted 4 months ago

Anonymous

Very well done and fast support. Professional and reliable. Highly recommended!

Posted 4 months ago

Helene L

They were very knowledgable in the respected area in terms of change in law/regulations that is crucial for the clients who are seeking for legal arvice.

Posted 4 months ago

Sara R

Very helpful and wonderful advice

Posted 4 months ago