Employment Law Case Update: Cockram v Air Products Plc

Mr Cockram participated in a Long Term Incentive Plan offered by Air Products. At age 50 Mr Cockram decided to retire, and at this age he was able to have benefits under the defined benefit pension scheme.

The defined benefit plan was replaced with a defined contribution plan before Mr Cockram’s retirement, where the earliest age a pension could be drawn was 55. Air Products set the customary retirement age under the terms of the defined contribution plan at 55, in line with the minimum pension age at the time.

This meant that when Mr Cockram left, aged 50, that he had not left at the customary retirement age, preventing him for receiving benefits under the defined contribution plan. Mr Cockram then brought a claim for age discrimination.

The Employment Tribunal (ET) found that Air Products could justify the direct age discrimination as a proportionate means of achieving a legitimate aim.

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

The CoA supported the ET’s findings; Air Products wanted to retain employees until retirement age, providing them with a legitimate aim. Air Products also used the defined contribution plan as a retirement incentive for older workers.

The CoA commented that 55 was a suitable age for employees to receive company benefits given it was in line with minimum pension age.

They held that the defined contribution plan encouraged the retention of older employees, encouraging experience and loyalty, and also encouraged an intergenerational mix of employees.

Employers should be aware that the provisions of retirement in incentive plans can be justified as long as it’s used to achieve a legitimate aim.

This article is from our weekly Employment Law Newsletter published on 26/04/2018.  If you would like to receive this newsletter directly and be kept up to date with recent cases and Employment Law news, email events@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.