Hospira v Ropers and Ors
The Labour Court recently issued its recommendation in the case of Hospira v Roper and Others. This decision has clarified the law relating to redundancy payments paid to employees close to retirement age. The Labour Court held that differences in the level of redundancy payments paid to the complainants, as compared with their younger comparators, fell within the exception to age discrimination permitted by section 34(3)(d) of the Employment Equality Acts, 1998 - 2011. This section allows an employer to pay a different rate of severance payment to an employee, which takes into account the period between the employee's age at termination and his/her compulsory retirement age, provided that that does not constitute gender discrimination.
By way of background, the complainants' employment was terminated upon the redundancy of their positions when Hospira decided to close its plant in Donegal in 2005/2006. A redundancy package was agreed with the representative trade unions. Each of the five complainants were close to retirement age at their termination date and Hospira paid them a package representing the amount of salary which they would have earned had they remained in employment until their normal retirement age of 65. Given their periods of service, the package paid to them was lower than what they would have received had it been based purely on their periods of continuous service. The five complainants brought a complaint of age discrimination to the Equality Tribunal, which found in their favour and held that it was necessary for the employer to provide objective justification for its treatment of the redundancy payments. Hospira appealed the Equality Tribunal's decision to the Labour Court.
The Labour Court upheld Hospira's appeal. It found that the relevant European Directive provides that Member States, rather than individual employers, may provide for differences in treatment on the grounds of age where such differences are objectively and reasonably justified by a legitimate aim and the means of achieving that aim are...