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

    Testimonials

    4.81 Average

    324 Reviews

    Mark Q

    Five Stars I was most impressed by the attention, courtesy, speed and above all, professionalism in dealing with my Settlement Agreement. I would certainly have no problem in recommending this firm to anyone in need of their services.

    Posted 1 day ago

    Ade A

    I was surprisingly impressed by how Redmans Solicitors handle my case. From the moment I call them to the absolute end of my case, they always look after my best interest.

    Posted 3 days ago

    Malcolm P

    they were there when others were not

    Posted 1 week ago

    Anonymous

    Excellent service all the way through from start to finish. Really great support and guidance from the team, they secured the offer that I wanted. I can't recommend Redmans highly enough and will be sure to use their services again should the need arise.

    Posted 1 week ago

    Anonymous

    Efficient and quick service!

    Posted 3 weeks ago

    Karen B

    Quick response very helpful Issue raised dealt with very quickly

    Posted 3 weeks ago

    Carmen T

    Redmans give Great service and advice on reading contracts. They can explain all the solicitors jargon into words that you can understand. I received excellent service an I will use them again and again.

    Posted 3 weeks ago

    Anonymous

    Very grateful for Mel’s efforts in handling my case from start to finish which I would have found very stressful without it. She was very professional, friendly and we had a positive outcome. Highly recommend.

    Posted 1 month ago

    Nalin W

    Mel Chin was my Legal Executive when I engaged the services of Redmans Solicitors to help with a redundancy matter. She was incredibly approachable and professional from start to finish. Specially I have to mention regarding prompt reply to all my email queries, It was super quick. I would thoroughly recommend Mel Chin. Many Thanks

    Posted 1 month ago

    Anonymous

    I'd highly recommend Redmans Solicitors. Mel was very helpful and assisted me throughout my case.

    Posted 2 months ago

    Anonymous

    Sacha was very thorough and very helpful, with great advice on when to act and when to wait on my case.

    Posted 2 months ago

    Anonymous

    I have been very pleased with the support I got from Redmans Solicitors on my case with my employer. Caroline has always helped me to put things in perspective and showed me different scenarios ultimately to help me taking the right decision. She was very professional and always available when I needed, and at the same time also emphatic which I found also really important to establish a strong relationship. Will definitely recommend!

    Posted 2 months ago

    Anonymous

    Prompt and efficient response to my enquiries. Excellent negotiating skills with my employer which considerably improved the terms of my settlement agreement.

    Posted 2 months ago

    Anonymous

    Very quick and professional service , Rana was very helpful

    Posted 2 months ago

    James G

    Very professional, knowledgeable and kept me informed at every stage of my case. I would highly recommend Redmans.

    Posted 2 months ago

    Pravina P

    Chris was really good and help solve my issues with current company. I would recommend him to anyone.

    Posted 2 months ago

    Paul L

    Sacha was extremely helpful in my matter. I would not hesitate you use Sacha or Redmonds again. Everyone was very helpful.

    Posted 3 months ago

    Monique N

    I had Mel Chin helping me with a settlement and she was very professional and reliable throughout my case. Mel provided me with a good understanding of what was happening and gave suggestions on routes I could take. My case was resolved and closed promptly although the opposing side were very difficult to deal with. A very big thank you to Mel and Chris.

    Posted 3 months ago

    Jackie C

    My first ever experience needing the services of a solicitor; cannot speak highly enough of Mel and Chris’s personable, reassuring and straight to the point advice in dealing with my settlement agreement. They put me at ease during an extremely stressful time. I am equally as happy with the outcome, as l am their professional services.

    Posted 3 months ago

    ""

    Really happy with the service. All very efficient. Mel rattled through things very fast, however was great whenever I needed to stop and ask a question! Would definitely return to Redmans if I ever needed Legal advice.

    Posted 3 months ago

    Peter F

    Very helpful and clear advice, would highly recommend.

    Posted 3 months ago