Legal update: Age discrimination and constructive unfair dismissal

30 July 2014

Clements v Lloyds Banking Plc & others UKEAT/0474/13

In a somewhat surprising decision, the Employment Appeal Tribunal (EAT) has held that an age discriminatory remark made by the Claimant’s manager (which the Tribunal accepted as being age discriminatory in itself), was not the material cause of the Claimant’s resignation and subsequent claim for constructive unfair dismissal. Usually, evidence of discrimination will be sufficiently serious in itself to form the repudiatory breach of contract which allows the employee to resign and claim constructive dismissal.

Mr Clements was the Head of Business Continuity at Lloyds Bank, and at the time of the claim was in his 50s. Mr Clements alleged that at a meeting in January 2012, his manager, a Mr Shawcross, had indicated concerns about Mr Clements’ performance and had twice remarked that Mr Clements was “not 25 anymore”.  Mr Shawcross denied the allegations. However, the tribunal concluded that it was “distinctly more likely that Mr Shawcross had indeed made the disputed remarks than that he had not” and therefore worked on the finding that Mr Shawcross had made the remarks in question.

Mr Clements believed that Mr Shawcross was attempting to push him out of his role at the bank and that a younger female colleague was set to replace him. In actual fact, the bank had in mind a man of a similar age to Mr Clements as his replacement. Mr Clements brought a grievance before the bank prior to his resignation, but this was not upheld.

The Tribunal found that Mr Clements had been constructively unfairly dismissed and there had been the necessary cumulative course of conduct, with the manner in which Mr Clements was told of his replacement’s appointment constituting the “final straw” breach. However, the tribunal rejected Mr Clements' arguments that the dismissal itself was caused to any material extent by any discriminatory act (i.e. the remarks made by Mr Shawcross). The fact that these ageist remarks were made was not enough to taint the dismissal with discrimination. The EAT upheld the tribunal’s judgment on appeal. The tribunal had not erred in its assessment of the facts.

This may strike some employers as an unexpected decision, and it is likely that the EAT was influenced by the fact that Mr Clements’ replacement was of a similar age to him and that Mr Clements did not mention the age-discriminatory remarks when asked in cross-examination to list all the things that the bank had done to drive him out. However, from an employer’s point of view, why end up here in the first place? This case demonstrates how much can turn on a few “throwaway” remarks by an employee. Employers should ensure that they have an Equality Policy in place. It is crucial that all staff (and particularly those with managerial responsibilities, who are more likely to have these kinds of discussions with staff) have completed equality and diversity training and that this is updated on a regular basis.

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