In Heskett v Secretary of State for Justice [2020], a need to reduce staff costs in order to balance the books of the probation service during a public sector pay freeze was held to be a legitimate aim which could objectively justify indirect age discrimination.
Craig Heskett was a probation officer from 2006, working in the public sector.
The Treasury announced a policy in 2010 which limited public sector pay increases. Consequently, Mr Heskett’s employer, introduced a new pay progression policy. Under the new policy, progressing from the bottom of Mr Heskett’s pay band to the top would take some 23 years, rather than the eight years it could have taken under the previous policy.
The new policy meant that older employees towards the top of the pay band would earn a significantly higher salary and pension benefits than others lower in the band.
Mr Heskett brought a claim for indirect age discrimination on the basis that the pay policy disadvantaged staff under 50 years old (including him).
His employer argued that its policy was a proportionate means of achieving a legitimate aim. It had changed its policy not just to cut pay (and save cost) but so it could “live within its means”.
The case reached the Court of Appeal. It considered previous case law which meant that “the saving or avoidance of costs will not, without more, amount to the achieving of a legitimate aim”. So, was the employer’s objective no more than a wish to save costs? If so, its objective justification defence would fail.
In this case, Mr Heskett’s employer was arguing that it could not afford to have a policy that would avoid the discriminatory impact. It was not simply saving money. The Court held that “an employer’s need to reduce its expenditure, and specifically its staff costs, in order to balance its books can constitute a legitimate aim for the purpose of a justification defence”.
Mr Heskett’s employer was found to have had a legitimate aim. However, was the Employment Tribunal correct in finding that its measures were a proportionate means of achieving that aim? Yes. The Court held that, in relation to proportionality, the Employment Tribunal had been entitled to consider the fact that the pay policy was not intended to be permanent, having been introduced for the short term as a stop-gap measure.
