MISS K MACCULLOCH v IMPERIAL CHEMICAL INDUSTRIES PLC [2008] UKEAT 0119_08_2207

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2008] UKEAT 0119_08_2207Case No Appeal No. UKEAT/0119/08Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MISS K MACCULLOCHAPPELLANTIMPERIAL CHEMICAL INDUSTRIES PLCRESPONDENT
Before
Mr Justice EliasDate 22 July 2008
[1]APPEARANCES For the Appellant MS JUDY STONE (of Counsel) Instructed by: Messrs Julian Taylor Solicitors Hazel Cottage Studio BICESTER OX25 3QX For the Respondent MR GAVIN MANSFIELD (of Counsel) Instructed by: Messrs DLA Piper UK LLP Solicitors 1 St Paul's Place Balm Green SHEFFIELD South Yorkshire S1 2JX SUMMARY AGE DISCRIMINATION UNFAIR DISMISSAL: Compensation The claimant contended that she suffered both direct and indirect discrimination on grounds of age because of the way in which the employer's redundancy scheme was structured. Redundancy payments were dependent on age and length of service but in a relatively complex way. She claimed to have been significantly disadvantaged by comparison with certain older workers, and also by those with longer service. It was conceded that there was prima facie direct discrimination. The Tribunal found that the discrimination was justified. The claimant appealed and the EAT upheld the appeal on the grounds that whilst the Tribunal had identified certain legitimate aims which the scheme was designed to achieve, there had been no proper attempt to determine whether the means adopted were proportionate to those aims, having regard to the significant detriment suffered by the claimant. On an entirely separate point, an appeal was allowed with respect to a small point concerning the assessment of compensation for an automatically unfair dismissal. THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT) The principal point in this case is whether a scheme adopted by the respondents, which provided for payments in the event of redundancy, discriminated against the claimant on the grounds of her age. The Tribunal held that it did not, and the claimant appeals. There is a secondary point relating to the amount of compensation awarded by the Tribunal for a dismissal which is automatically unfair for failure to comply with the statutory dismissal procedures. We return to that issue later in this judgment. The redundancy payments scheme.[2]The scheme in issue had been in existence since 1971, but has since been modified to eliminate sex discrimination. Payments made pursuant to the scheme are conditioned by two factors. First, the payment is increased depending on length of service, although the scheme does not reward any length of service beyond ten years. Second, the size of the redundancy payment also increases with age. The variations are significant. For example:(1) An employee of up to the age of 35 is paid 58.33% of relevant pay.(2) An employee aged 40 receives 97.22% of relevant pay.(3) An employee aged 45 receives 136.11% of relevant pay.(4) Employees aged between 50 and 57 are paid 175% of relevant pay.(5) The figures reduce between the ages of 57 and 61 until an employee who is aged over 61 years and 4 months is paid only 50% of relevant pay.[3]A curiosity of the scheme is that the amount varies in minute detail for each month up to the age of 50, but thereafter there is no difference until the age of 57 is reached when the amount begins to taper off significantly. In fact the Tribunal found that this tapering of the scheme was not justified, even though the issue was not strictly before them. Originally this tapering had been linked to a final salary pension entitlement, and was to ensure that these employees would not be better off as a result of their redundancies. However, that was no longer the case and in these changed circumstances this reduction was not justified. 4. At the time of her dismissal the claimant was almost 37 and her length of service was 7 years and 8 months. On the multiplier basis, this meant that she was entitled to just over 55% of her gross annual salary. This compared with 175% for someone aged between 50 and 57 with ten or more years' service. She alleged that this constituted both direct and indirect age discrimination. It was direct discrimination because the amount was directly related to age. It was indirect discrimination because it was also related to years of service; in order to acquire ten years' service it was necessary for an employee to fall into the older age bracket. The legal framework. 5. The material domestic provisions relating to age discrimination are found in the Employment Equality (Age Regulations) 2006 (the 2006 Regulations). These are designed to give effect to the EU framework Directive on equal treatment in occupation and employment ( Council Directive no. 2000/78/EEC ). This outlaws, amongst other things, age discrimination with respect to pay. Regulation 3 provides as follows:
"Regulation 3 (1) For the purposes of these Regulations, a person ("
A") discriminates against another person ("B") if - (a) on grounds of B's age, A treats B less favourably than he treats or would treat other persons, or (b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but – (i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons, and (ii) which puts B at that disadvantage, and A cannot show the treatment or, as the case may be, provision, criterion or practice to be a proportionate means of achieving a legitimate aim. (2) A comparison of B's case with that of another person under paragraph (1) must be such that the relevant circumstances in the one case are the same, or not materially different, in the other. (3) In this regulation – (a) "age group" means a group of persons defined by reference to age, whether by reference to a particular age or a range of ages; and (b) the reference in paragraph (1)(a) to B's age includes B's apparent age." 6. The unusual feature of age discrimination when compared with discrimination on other grounds is that it provides that the employer can seek to justify direct age discrimination. It is not just a provision, criterion or practice giving rise to potential indirect discrimination which can be justified, but treatment which specifically discriminates on grounds of age. This reflects the provision in Article 6 of the Directive which provides that:
"Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary." 7. Regulation 32 makes an exception for certain benefits based on length of service. It is cast as follows: "
Exception for provision of certain benefits based on length of service (1) Subject to paragraph (2), nothing in Part 2 or 3 shall render it unlawful for a person ('A'), in relation to the award of any benefit by him, to put a worker ('B') at a disadvantage when compared with another worker ('C'), if and to the extent that the disadvantage suffered by B is because B's length of service is less than that of C. (2) Where B's length of service exceeds 5 years, it must reasonably appear to A that the way in which he uses the criterion of length of service, in relation to the award in respect of which B is put at a disadvantage, fulfils a business need of his undertaking (for example, by encouraging the loyalty or motivation, or rewarding the experience, of some or all of his workers)." This provision does not apply to redundancy payments. But it does demonstrate the uncontroversial point that business needs may in principle justify benefits differentiated on grounds of length of service. 8. Regulation 33 also provides a specific exception for certain schemes providing enhanced redundancy payments to employees. The schemes exempted under regulation 33 broadly have to mirror the conditions under the statutory redundancy payments scheme, but they can be more generous. It is not disputed that that exception is inapplicable here. 9. In this case it was conceded that the scheme adopted does discriminate directly on grounds of age and therefore the crucial issue is whether the difference in treatment could be justified.[10]The legal principles with regard to justification are not in dispute and can be summarised as follows:(1) The burden of proof is on the respondent to establish justification: see Starmer v British Airways [2005] IRLR 863 at [31].(2) The classic test was set out in Bilka-Kaufhas GmbH v Weber Von Hartz (Case 170/84) [1984] IRLR 317 in the context of indirect sex discrimination. The ECJ said that the court or tribunal must be satisfied that the measures must "correspond to a real need … are appropriate with a view to achieving the objectives pursued and are necessary to that end" (para 36). This involves the application of the proportionality principle, which is the language used in regulation 3 itself. It has subsequently been emphasised that the reference to "necessary" means "reasonably necessary": see Rainey v Greater Glasgow Health Board (HL) [1987] ICR 129 per Lord Keith of Kinkel at pp 142-143.(3) The principle of proportionality requires an objective balance to be struck between the discriminatory effect of the measure and the needs of the undertaking. The more serious the disparate adverse impact, the more cogent must be the justification for it: Hardys & Hansons plc v Lax [2005] IRLR 726 per Pill LJ at paras 19-34, Thomas LJ at 54-55 and Gage LJ at 60.(4) It is for the employment tribunal to weigh the reasonable needs of the undertaking against the discriminatory effect of the employer's measure and to make its own assessment of whether the former outweigh the latter. There is no 'range of reasonable response' test in this context: Hardys & Hansons plc v Lax [2005] IRLR 726 , CA.[11]The following paragraphs from the judgment of Pill LJ in the Hardys and Hansons case (which concerned sex discrimination) were relied on by both parties. They make good the propositions on justification we have set out (paras 32-34):
"Section 1(2)(b)(ii) requires the employer to show that the proposal is justifiable irrespective of the sex of the person to whom it is applied. It must be objectively justifiable ( Barry ) and I accept that the word 'necessary' used in Bilka is to be qualified by the word 'reasonably'. That qualification does not, however, permit the margin of discretion or range of reasonable responses for which the appellants contend. The presence of the word 'reasonably' reflects the presence and applicability of the principle of proportionality. The employer does not have to demonstrate that no other proposal is possible. The employer has to show that the proposal, in this case for a full-time appointment, is justified objectively notwithstanding its discriminatory effect. The principle of proportionality requires the tribunal to take into account the reasonable needs of the business. But it has to make its own judgment, upon a fair and detailed analysis of the working practices and business considerations involved, as to whether the proposal is reasonably necessary. I reject the appellants' submission (apparently accepted by the EAT) that, when reaching its conclusion, the employment tribunal needs to consider only whether or not it is satisfied that the employer's views are within the range of views reasonable in the particular circumstances. The statute requires the employment tribunal to make judgments upon systems of work, their feasibility or otherwise, the practical problems which may or may not arise from job sharing in a particular business, and the economic impact, in a competitive world, which the restrictions impose upon the employer's freedom of action. The effect of the judgment of the employment tribunal may be profound both for the business and for the employees involved. This is an appraisal requiring considerable skill and insight. As this court has recognised in Allonby and in Cadman , a critical evaluation is required and is required to be demonstrated in the reasoning of the tribunal. In considering whether the employment tribunal has adequately performed its duty, appellate courts must keep in mind, as did this court in Allonby and in Cadman , the respect due to the conclusions of the fact finding tribunal and the importance of not overturning a sound decision because there are imperfections in presentation. Equally, the statutory task is such that, just as the employment tribunal must conduct a critical evaluation of the scheme in question, so must the appellate court consider critically whether the employment tribunal has understood and applied the evidence and has assessed fairly the employer's attempts at justification. The power and duty of the employment tribunal to pass judgment on the employer's attempt at justification must be accompanied by a power and duty in the appellate courts to scrutinise carefully the manner in which its decision has been reached. The risk of superficiality is revealed in the cases cited and, in this field, a broader understanding of the needs of business will be required than in most other situations in which tribunals are called upon to make decisions."
[12]We should add that it was not submitted that the test for justification for direct discrimination is different than the test for indirect discrimination, although that is an issue before the ECJ in R v Secretary of State for Business Enterprise and Regulatory Reform (ex-party Incorporated Trustees of National Council on Ageing) [2007] EWHC 3090 (Admin) We would accept, however, that at least in circumstances where the direct discrimination is reflected in general rules or policies, the discriminatory effect of the measure will necessarily be greater than where a rule is cast in apparently neutral terms but has indirect discriminatory adverse effects. To that extent, direct discrimination may be harder to justify. The Tribunal's decision. 13. The Tribunal directed itself that in order to determine the issue of justification it had to determine whether the scheme could be treated as a proportionate means to achieve a legitimate aim. As a bare statement of the test for justification, that is consistent with the principles we have outlined. 14. The employers identified a number of aims of the scheme. First, it was alleged that one of its purposes, reflected in the ten year service criterion, was to encourage and reward loyalty. The Tribunal accepted that this was a legitimate aim, and indeed was one of the aims underlying the statutory redundancy payments scheme in its present format. We note that it is also one of the potential justifications expressly referred to in regulation 32.15. A second aim relied upon by the employers, also accepted by the Tribunal, was that it was legitimate to give a larger financial payment to older workers because they were more vulnerable in the job market and it gave them some protection from the stress which losing employment would otherwise create. The Tribunal concluded that it did not require evidence from any express research study to support that conclusion. The Tribunal observed that it had ample evidence, from its own knowledge, that older workers out of a job had real difficulty in obtaining new employment. That may not be how matters ought to be, given the protection against age discrimination, but that is still the practical reality.16. Finally, the Tribunal also accepted the third reason relied upon by the employers, namely that it was extremely popular being a generous scheme which applied to all members of staff, regardless of where they worked or whether they were manual or white collar. The respondents submitted that having these generous payments for older workers encouraged people to leave who might not otherwise have done so, thereby making available space for more junior employees. It also avoided compulsory redundancies and made it easier to manage change.17. The Tribunal was not, however, persuaded that it was a legitimate objective that the company should honour contractual promises it had made to the work force. As the Tribunal noted, if the scheme were unlawful because of discrimination on grounds of age then the scheme would have to be amended to make it legally compliant whatever expectations the parties might have.18. Having identified these aims, the Tribunal asserted that the scheme was a proportionate means to achieve these aims. The Tribunal did not, however, deal with that part of the case with any precision. They said this (paras 21-22): "Was it a proportionate means of achieving those aims? The Claimant said that the scheme which had been in force for 35 years had never been the subject of review apart from a minor amendment in relation to sex discrimination. It was clear from all the Respondent's witnesses that the staff really appreciated the generosity of the scheme. It applied to all members of staff regardless of where they worked, be it managerial or manual. It did not require any review on the basis that no person had sought to challenge the scheme until such time that age discrimination came into force. Why should they? Most employees would bite the hands of their employers to have a scheme of this nature. The Respondent argues that by having such a scheme in place which is so generous it encourages those people who might be a block in development such older employees to take voluntary redundancy on these generous terms. It avoids the need for compulsory redundancy and has allowed the Respondent to manage change in a changing industrial world. The Tribunal considers all of those are proper aims and therefore it makes it proportionate to have such a scheme."19. In reaching this conclusion the Tribunal also considered but rejected the view that other schemes should have been adopted. The company did in fact consult over the possibility of creating a scheme which would fall within the terms of regulation 33 but there was strong opposition from the workforce because a substantial proportion of the staff would have been worse off.20. The Tribunal touched very briefly on the question of indirect discrimination. They had in our view correctly stated, that if the scheme was a proportionate means of achieving a legitimate aim, then that would provide justification for both direct and indirect discrimination. Accordingly their finding that the scheme was justified answered the indirect discrimination claim also. In the course of this hearing, Ms Stone, counsel for the claimant, has accepted that this is so. The grounds of appeal.21. The first ground of appeal is that the Tribunal made a fundamental error in that in approaching the issue of justification, it considered whether the scheme as a whole was justified whereas it ought to have focused upon the individual claimant and asked whether the reasonable needs of the undertaking outweighed the discriminatory effect on the individual. Reliance is placed on the passage cited in the decision of Pill LJ in the case of Hardys & Hansons plc v Lax [2005] IRLR 726 , which we have set out.22. It is submitted that the Tribunal never did that. They asked whether the objectives of the scheme were legitimate, but without individualising the case as a direct discrimination case requires. They ought to have asked whether the particular treatment was justified and that required considering the particular application of the scheme to the claimant.23. Second, it is submitted that the Tribunal failed to identify the differential treatment that required justification. The Tribunal on occasions compared the employers' scheme with the statutory redundancy scheme and the enhanced schemes permitted by regulation 33. It did not, however, set out the statutory test for discrimination found in regulation 3 of the 2006 Regulations . Nor did it make a direct comparison with the comparators relied upon by the claimant. 24. Furthermore, it is alleged that insofar as a comparison was made with the statutory scheme, the Tribunal was in any event in error in saying that the scheme followed "in very minute detail" the way in which the statutory scheme worked. This scheme only takes into account ten years' service whereas the statutory scheme takes account of twenty; and the variations with age are by no means as marked under the statutory scheme. 25. Third, it is said that the Tribunal did not carry out the crucial task of determining whether the aims of the scheme as asserted were the true aims of the scheme. They simply took what the respondent asserted were the scheme's aims at face value. The Tribunal did not, for example, have any evidence that it was harder for older workers to obtain employment than younger ones. Moreover, the only contemporaneous document that was available touching on the scheme, namely an extract from a manager's handbook which was produced when the scheme was first introduced, indicated that the purpose was to encourage staff, particularly older staff, to leave in the event of redundancy and to make payments that are mainly tied to age. There are also allegations that the Tribunal's finding that the aims were established was perverse in any event. 26. The fourth ground - which is in fact very closely interlinked with the first - is the contention that the Tribunal never did carry out a proportionality analysis at all. It identified the legitimate aims, but it did not go on to consider whether the means chosen were proportionate. This is an important separate issue, which arises quite independently of the aims. The Tribunal appears to have assumed that if the aims are legitimate then they are necessarily proportional to the harm suffered and justification is established: see the last sentence of paragraph 22 of the decision reproduced in paragraph 10 above. Had the Tribunal adopted a proper structured approach to the issue of justification, then it would have been bound to address this question. An important element in the claimant's case was that it was unjust to award somebody almost 2.5 times more redundancy pay simply on the grounds that they were twenty years older, yet one looks in vain in the Tribunal's reasoning for an explanation as to why such a differential was justified. 27. The respondents submit that the Tribunal applied the standard laid down by Pill LJ in the Hardys & Hanson case. We were also reminded that we must pay due respect to the conclusions of the fact finding Tribunal and should not interfere simply because of imperfections in presentation. 28. Here it was conceded that there was discrimination on grounds of age and the only question was whether it was a proportionate means of achieving a legitimate aim. The Tribunal were aware that the claimant was alleging that there had been a huge disparate adverse impact, and they identified the potential differentials which age produced. They were entitled to look at the justification of the scheme as a whole when considering whether the interference with the right not to be discriminated against on grounds of age was proportionate. 29. The Tribunal did not fall into the error of confusing this scheme with the schemes exempted by regulation 33. On the contrary, they noted that this scheme had to be justified under regulation 3 precisely because it did not fall under the regulation 33 exception. The Tribunal identified legitimate aims which plainly were findings sustainable on the evidence before them. They heard five employees of the respondent and had various documents before them, and were entitled to conclude therefore that the means adopted were proportionate to those aims.[30]Mr Mansfield, counsel for the respondent, accepted that nowhere in the decision does the Tribunal expressly weigh the aims of the scheme against the detrimental impact on the claimant. He argued, however, that it can be readily inferred that they carried out that exercise. The claimant was emphasising to the Tribunal the significant differential between what she received and what her chosen comparator would have received; they looked at the question of alternative schemes, including the introduction of a scheme which would comply with the exemption in section 33 and explained why that was not appropriate; and they also found that the tapering of the payment for those over 57 was not justified. That must have involved a proportionality analysis. It is therefore not justified, he submits, simply to analyse the decision as though the issue of proportionality was dealt with only in paragraphs 21 and 22 (see para 17 above).31. The Tribunal's finding on indirect discrimination was unassailable and followed inevitably from their conclusion with respect to direct discrimination. In any event the claimant produced no convincing evidence that she personally suffered at all from the ten year service requirement. She was in her late thirties and there was no evidence before the Tribunal as to the ages at which this company tended to recruit staff and whether she was personally adversely affected by this 10 year rule. Conclusions.32. During the course of argument it became clear that the first ground was more limited than we had initially understood. Ms Stone is not saying that it is inappropriate to consider the scheme at all; her submission is that there must at some point in the justification exercise be evidence that the Tribunal has weighed the reasonable needs of the undertaking with the discriminatory effect on the individual. Here it is submitted that this did not occur because the Tribunal never did clearly carry out that exercise; there is no evidence that they asked themselves whether the means were a proportionate way of achieving the aims. In essence, therefore, this ground is inextricably linked to the final ground that the Tribunal did not carry out a proportionality test33. In our judgment, the Tribunal was plainly justified in analysing the scheme in order to determine the reason for the claimant's treatment; that reason is linked inextricably to the aims of the scheme. In a scheme like this, where there is a standard set of rules identifying the amount of redundancy payment to be paid, and no discretion in the amount of payment, we think it would be an error to examine the application of the scheme to the individual as though the scheme was irrelevant to his or her position.34. Ms Stone does not contend otherwise. The treatment of the claimant was the result of the application of fixed rules. She fell into a particular category, depending on age and length of service, and was treated accordingly. We accept, as Ms Stone submits, that the extent to which she (and others similarly placed) are disadvantaged by the rules of the scheme, when compared with her comparators, is highly relevant to the proportionality issue (assuming that legitimate aims have been established). But the reason for the claimant's treatment is the adoption and application of the scheme, and it is the aims of the scheme which must justify (or not) her particular treatment.35. The question then arises whether the means to achieve those aims, having regard to the detrimental effect on the individual, are justified. Even in that context however, we do not think that the position of the individual can be regarded without any consideration for the scheme as a whole. It seems to us that in carrying out the proportionality exercise it will still be necessary to bear in mind that any change in the differential between the claimant's payment and the sum paid to her comparator will necessarily have an impact on the structure of the scheme as a whole. So whilst the proportionality test must focus on the extent of the disadvantage, the balancing exercise will have to have regard to the impact which a different scheme would have on the whole range of employees.36. The fact that the rules are fixed and do not vary with individual circumstances is a feature of the scheme which itself needs justifying - although we surmise that in practice that will not be difficult in a scheme of this nature since transparency and equality of treatment are important principles in their own right. However, we do not accept that in assessing justification for a scheme of this kind it is necessary or appropriate to focus on the matters specifically referable to the individual but not shared by others of the same age or length of service. The employer has never sought to treat the claimant less favourably as an individual, but only in so far as she falls into a particular category defined by age and length of service. No doubt where a scheme envisages the exercise of discretions depending on individual circumstance, different consideration may arise. But that is not this case.37. The central issue is, therefore, whether the Tribunal did properly engage with the proportionality exercise. We agree with the claimant that they did not. It may well be that they had it in mind, and did not simply make the false assumption that if the aims were legitimate then the discrimination was justified. However, notwithstanding Mr Mansfield's attractive argument, we are not confident that that is so. As we have said, nowhere is there any express reference to the need to balance the reasonable needs of the business with the discriminatory effects on the claimant38. In this case the claimant was significantly adversely affected as a result of a scheme which linked the payment directly to age. The differentials in pay were very significant as between different categories of workers. It cannot be assumed that because the scheme in broad terms achieves certain business objectives that this necessarily establishes the justification for those differentials. The principal features which the Tribunal appears to have considered in the context of the proportionality issue were the generosity and general acceptance of the scheme. These may well be relevant in helping to achieve the aims of the scheme, but they do not deal at all with the issue whether the difference in treatment was justified.39. We do not accept Mr Mansfield's submission that there is enough in the decision to enable us safely to conclude that the Tribunal in fact carried out the appropriate exercise. In any event, it is such a fundamental element in the justification determination that a most careful appraisal is required in order to justify this discrimination. That has been stated on numerous occasions, not least in the extract from Pill LJ's judgment in the Hardys and Hansons case which we have set out above (see para 10). The decision must demonstrate that such an appraisal has taken place.40. Nowhere in this decision is there a considered recognition of the degree of difference in the payment made to the claimant and the comparator, and an assessment as to whether this is reasonably necessary to achieve the objectives of the scheme. We not saying that it could not be justified as a proportionate response, but the analysis to sustain that conclusion is lacking in this judgment.41. We will deal relatively briefly with the other grounds of appeal, which we reject. We do not accept that the Tribunal made the error of failing to compare the claimant with her comparators but instead compared her position as it would have been under the statutory redundancy scheme. The Tribunal was plainly well aware of the differential effects of the scheme.42. Initially we agreed with Ms Stone that it was misleading for the Tribunal to state that this voluntary scheme followed "in very minute detail" the statutory scheme, but we think that Mr Mansfield may well be right in saying that the Tribunal did not thereby mean to suggest that the two schemes were precisely mirroring each other, but only that the employer's scheme is minutely detailed in varying the amount of payment by reference to months of employment. We would accept Ms Stone's submission that if the Tribunal thought that this scheme must be proportionate because it mirrored so closely the statutory scheme, that would plainly be an error. On reflection, however, we doubt whether they were saying that.43. Nor in our view was it an error of law to take the respondent's assertions of the scheme at face value; indeed, we think that is a somewhat tendentious way of analysing the Tribunal's decision. What the aims of the scheme are is a matter of evidence. Those may be found in contemporaneous documents, but they may also be found by evidence adduced already before the Tribunal. The Tribunal heard a number of witnesses from the employers dealing with the scheme and its objectives. We see no conceivable ground for criticising the Tribunal for reaching its conclusions on the basis of that evidence and preferring this to a statement of the purposes of the scheme as perceived over thirty years earlier.44. There were certain other related arguments advanced to the effect that the Tribunal was perverse in finding that the scheme had the aims which it did. Perversity is a very high hurdle to climb, and in our view the claimant was nowhere near doing so here. We deal with the points very summarily.45. First, it was said that it was a plain error to say that the scheme could encourage loyalty when it only rewarded service for up to ten years and did not differentiate thereafter. In our view, the Tribunal was plainly entitled to say that a payment related to years of service does reward loyalty, albeit perhaps to a lesser extent than one which did so by reference to longer periods than ten years.46. Moreover, we accept the respondent's submission that even for those who have accrued ten years' service there is an element of rewarding loyalty when they know that in the event of future redundancy their payment will increase with age. This finding was nowhere near perverse.47. Similarly, it is said that the Tribunal was wrong to say that an aim of the scheme was to assist older employees. It is said that it could not possibly be legitimate to encourage older employees to leave since that is itself age tainted discrimination. However, we do not think the Tribunal is saying that the aim was simply to encourage the older employees to leave: it is indicating that older workers can be a block on recruitment and it encourages turnover and the prevention of blockage in the employment system if some older workers are tempted to leave. That is, in principle, capable of being a legitimate objective. Indeed, Article 6 itself refers to labour markets and employment policy objectives as being, in principle, capable of justification.48. It was also submitted that the employers should have led evidence about this. We do not agree. The Tribunal was fully entitled to draw from its own experience - shared we would suggest by all in the industrial relations' field - that older workers find it harder to find work than younger workers, notwithstanding the existence of age discrimination laws. Ms Stone suggests that this does not justify having a set payment for those between 50 and 57 whereas below that age the payment depends on the months of service. It seems to us that that argument is directed to proportionality rather than the aim itself.49. Third, it is said that the Tribunal was confused in suggesting that it was a legitimate aim to respect the contractual entitlements and legitimate expectations of the existing work force. The short answer to this point is that we do not think that this is a fair reading of the decision. The Tribunal found that this was not a legitimate objective, and in doing so rejected the employer's contention that it was.50. Finally, on this point it is said that the Tribunal erred in saying that the scheme was generous and that this was a legitimate aim. We would agree that there had been an error if that were an accurate description of the Tribunal's analysis. However, it seems to us that the Tribunal is merely saying that because the scheme is generous, that is a factor which helped to ensure that there would be volunteers for redundancy and made planning that much easier. It was not the generosity per se which was the lawful aim.51. A point raised in the claimant's skeleton argument but not in the event pursued was that there was no proper analysis of the indirect discrimination claim. As the Tribunal observed, and Ms Stone accepts, that claim really stands or falls with the argument about justification.52. We would only observe that if it becomes relevant to analyse in detail the indirect discrimination argument, then the Tribunal would have to address the question whether the claimant did suffer on grounds of age as a result of the application of the ten years' service criterion. That may depend upon the ages at which employees are typically recruited into the business.53. Whilst not finding for the claimant on all of the grounds, we find there is a failure by the Tribunal here to carry out the proportionality exercise. Without doing that they could not safely reach the conclusion that this age discrimination was justified. The unfair dismissal appeal.54. This can be dealt with relatively briefly. The Tribunal found that there had been an automatically unfair dismissal because the statutory dismissal procedures had not been complied with properly. They went on to conclude that it was likely in any event that the appellants would have ceased to be employed as of 2 January 2008 and calculated compensation up to that date. The basis of the finding by the Tribunal was their conclusion that it was highly likely that a particular takeover would occur on that date and that as a consequence the claimant would have lost her job.55. Ms Stone submitted that the Tribunal had erred because they had failed to have regard to the evidence which had been adduced before them to suggest first, that the takeover might not take place, and second, that in any event the claimant might not be dismissed. We reject that submission. The Tribunal is not obliged to set out all the evidence in relation to a particular matter. They set out their conclusion that the takeover would in all likelihood occur - and in fact it did occur, precisely as they had envisaged - and furthermore, they dealt in some detail with the question of whether the claimant would be dismissed on takeover. They gave careful reasons for finding that she would. It is simply not a fair reflection of their decision to say that they gave no reasons for their conclusions, or failed fairly to deal with the issue.56. An alternative argument is that in any event the Tribunal should not simply have asked whether on the balance of probabilities the dismissal would have occurred but should have assessed the chances of it not occurring and calculated the future loss accordingly. We do not accept that submission either. The Tribunal heard evidence as to what was likely to happen in the very near future, and indeed it was what precisely did happen. We think that on a fair reading of their decision they did not think there was any real chance of the employee remaining in employment beyond that date. In any event, they are not bound to adopt a chance approach in all cases as the Court of Appeal made clear in O'Donoghue v Redcar and Cleveland Borough Council [2001] IRLR 615 .57. Finally, the Tribunal did not allow certain expenses incurred by the claimant when she worked for a period as a self employed person to be recovered as part of the compensation. It was submitted that the Tribunal ought to have done so. After some discussion, it became clear that the Tribunal did err in its approach to this issue. It is common ground that the task of the Tribunal was to assess the claimant's loss by having regard to her net income from this employment. The parties are now agreed in principle how this should be done and it is not necessary to say anything more about it. Any further refinement can be determined at the remedies hearing. Disposal.[58]The appeal succeeds on the discrimination issue, and to a limited extent on the question of compensation.59. We have considered carefully how we should dispose of this matter. Ms Stone submits that we should send it back to a fresh tribunal who should be required to assess the question of proportionality in the light of the findings of fact made by this Tribunal. We do not think that is desirable. It would be extremely difficult for that tribunal to carry out the proportionality exercise without having heard the evidence relating to the legitimate aims; and there may be some uncertainty as to precisely what facts they are bound by. It seems to us that the alternatives are either a fresh tribunal hearing the whole question of justification again, or that we send it back to the same Tribunal.60. We are all of us satisfied, having regard to the criteria enunciated in Sinclair, Roche and Temperley v Heard [2004] IRLR 763 that this is a case where the matter can properly be sent back to the same Tribunal. They are already seized of the unfair dismissal issue because the remedies have still to be determined. There is no question that they have demonstrated any bias or impropriety in the way in which they have dealt with the case, and we have no reason to suspect that they will do other than seek to analyse the proportionality issue conscientiously in the light of this judgment. It will be entirely a matter for them whether they are willing to hear further evidence from the parties about this issue, although we suspect they may wish to hear further submissions.

Cited in 1 later judgment