Welcome, Furlough Part II – what took you so long?
The employer established a talent pool to identify, develop and retain managers. The talent pool was intended to comprise a pool of high performing and talented employees who would benefit from additional training and promotion opportunities. It allowed the employer in some cases to fill vacancies quickly without needing to advertise or interview candidates.
The Claimant was aged 66/67 and had until recently occupied a management grade 8 post. Following a restructuring she was redeployed into a grade 7 post. Two grade 8 vacant positions then became available. The Claimant expressed her interest in applying but was told that the roles were being filled from the Talent Pool of which she was not a member. She was therefore denied the opportunity to apply.
There were three entry routes into the Talent Pool. Employees graded at appraisal by their manager as exceeding expectations were entered. There were also two methods to nominate oneself for entry, either by appeal against appraisal grade or by self-nomination during two short application windows each year, resulting in each case in assessment by an independent manager. The Claimant was graded at appraisal as meeting expectations and did not appeal against this rating. Nor did she nominate herself for inclusion in the Talent Pool.
The Claimant originally focussed her case on her claim that management sought to discourage her from advancing her career because she was close to retirement, but then withdrew her direct discrimination claim. Instead she focussed on indirect discrimination by reference to statistics showing that whereas 12% of employees were aged 55-70, only 6% of Talent Pool members were in that age group. Whilst employees aged below 55 had a 1:34 chance of being in the Pool, older employees only had a 1:73 chance.
Indirect discrimination concerns provisions, criteria or practices (PCPs) which are applied equally to all, regardless of age (or sex, race or any other protected characteristic), but which put members of the relevant group at a particular disadvantage when compared with others. There is an objective justification defence for employers who can show that the PCP is a proportionate means of achieving a legitimate aim, but this is often difficult in practice. As per Lady Hale in the leading case of Essop, whereas the prohibition of direct discrimination aims to achieve equality of treatment, indirect discrimination assumes equality of treatment, aiming instead to achieve a level playing field and equality of results: ‘It is dealing with hidden barriers which are not easy to anticipate or to spot’.
The Tribunal found that the ‘Claimant was not offered the opportunity to apply for the roles… because she was not in the Talent Pool, but we find that this was because she had not realistically tried to gain entry’. This was a reference to the Claimant’s failure to appeal her appraisal rating or to self-nominate. Accordingly the Tribunal held that the necessary causal connection between the PCP and the particular disadvantage in the case of the individual herself was absent.
The Tribunal also held that the Talent Pool was a proportionate means of achieving the legitimate aim of appropriate succession planning by providing pre-approved candidates for promotion as necessary in an emergency response organisation.
These findings were overturned on appeal by the EAT. There was no evidence as to what would have happened had the Claimant appealed her appraisal or self-nominated. As it could not be said that the consequence of the Claimant appealing or self-nominating would have been entry into the Talent Pool, equally it could not be said that it was her failure to apply or self-nominate which had prevented her from being in it.
The EAT emphasised that it is important not to over-complicate the issues. The employer’s policy of promoting from the Talent Pool had the effect of limiting the pool from which applicants for more senior roles could have been selected and this had a particularly disadvantageous effect on one group of older employees. The Claimant was one member of that group and she had been affected by the policy because she was not considered or allowed to apply for two roles which otherwise would have been open to her.
The EAT also overturned the Tribunal’s finding on justification. The Tribunal had not carried out the necessary critical evaluation of the discriminatory effect of the policy, and the strength of the employer’s reason and need for it. It had failed, for example, to consider whether there was a genuine need for the two vacancies quickly to be filled, or whether any less discriminatory measures would have sufficed. It noted that membership of the Talent Pool could have been a desirable, rather than necessary, condition for consideration for promotion.
This case highlights the need for employers carefully to review apparently neutral policies and practices in respect of recruitment, promotion, development and benefits to ensure they are not open to legal challenge as indirectly discriminatory.
Andreas is a partner in our employment team. He has substantial litigation experience, with a particular focus on complex and high value employment and partnership disputes. Andreas has a particular interest in international and cross border employment law. He is a former president of the labour law commission of AIJA.
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