And The Law Says

Can you claim for age discrimination following changes to contracts after a TUPE transfer?

February 24, 2015


(Braithwaite and others v HCL Insurance BPO Services Ltd)

Following a TUPE transfer, Mrs Braithwaite and others (the appellants) became employees of HCL Insurance Services Limited (HCL). This meant that there was some contractual inconsistency between the contracts held by the appellants, against those held by HCL’s existing employees. When HCL suffered financial losses, it looked to reducing staffing costs, and therefore wanted to amend the appellants’ contracts for uniformity. As a result, HCL proposed to remove the appellants’ right to a number of benefits, which included private health insurance and enhanced redundancy payments, whilst also increasing their working hours and reduce their annual leave entitlement.

The appellants put forward that these changes would put them at a particular disadvantage because they were older and, through their many years of service, had built up their entitlements. Therefore, they proposed alternative measures, which included phasing or reducing the changes, securing extra funding from HCL’s parent company, and seeking voluntary redundancies.

These counter suggestions were rejected by HCL, and as the appellants refused to sign to the new terms and conditions, they were dismissed.

The appellants brought several claims forward to the tribunal, including age discrimination. They argued that their requirement to sign to the new terms was a PCP that was indirectly discriminatory on the grounds of age, in accordance to Section 19 of the EqA 2010.

The tribunal held that although the appellants were put at a particular disadvantage, it was not indirectly discriminatory. They reasoned that the changes in the terms and conditions could be objectively justified as a proportionate means of achieving HCL’s legitimate aim of reducing staffing costs to ensure its future viability.

Both sides appealed to the EAT, who rejected both appeals. The EAT held that there was a PCP, but that it was not indirectly discriminatory because it was objectively justified. The PCP was reasonably necessary because there were no less discriminatory means that achieved HCL’s aim.

Sunil Abeyewickreme Says: In this EAT case it is clear that a change to terms and conditions, even those following transfer of employment in accordance with TUPE, can amount to a provision, criterion or practices that amounts to indirect age discrimination. However, there can be a defence to such, if employers consider whether there are any alternatives available to achieve their objective.  It is important for employers prior to making any changes to terms and conditions of employment to carefully consider all alternatives, analyse the impact of their decision and consider the justification defence.

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