Voluntary early retirement and age discrimination

Was it discriminatory to prevent an employee from changing her mind in respect of the options offered to her whilst at risk of redundancy? Amaya Floyd reports on an Employment Appeal Tribunal ruling.

In the EAT case of Palmer v RBS the bank had commenced a restructuring process. Those at risk of redundancy were given the option of choosing between redeployment or voluntary redundancy. In addition to these options, employees aged over 55 were given the option of voluntary early retirement. At a later date, the option of voluntary early retirement was also offered to those employees under 55 but over 50.

Ms Palmer was among those placed at risk of redundancy. Aged 49, she originally opted for voluntary redundancy. However, following the new offering of voluntary early retirement to those over 50, she wished to change her choice to redeployment. She was aware that this was a lengthy process and sought to reach the age of 50, then entitling her to the early retirement option. RBS did not permit Ms Palmer to change her mind, and she was later dismissed by reason of voluntary redundancy.

Ms Palmer argued age discrimination in the Employment Tribunal (ET) on the basis that she was unable to change her mind, and treated less favourably than those aged over 50.

The ET dismissed the claim and this decision was later upheld by the EAT. They held that Ms Palmer had not been subjected to less favourable treatment. Unlike Ms Palmer, her comparators could have lawfully chosen voluntary early retirement. Those under the age of 50 were prevented from doing so by a statutory restriction in the Finance Act 2004.

Best practice

This case highlights the need for employers to be aware of possible discrimination implications during a redundancy process. With slightly different facts, this could well have resulted in a finding of unlawful age discrimination.

It is also worth noting that where multiple pension schemes are in place, the rules of each individual scheme may limit the discretion available to employers when considering options such as early retirement.

Amaya Floyd is a solicitor at Veale Wasbrough Vizards. She can be contacted on 0117 314 5640 or This email address is being protected from spambots. You need JavaScript enabled to view it..