The recent Employment Tribunal case of Wright and others v Purple Parking Limited has brought into sharp focus the potential cost to employers of getting employee insurance wrong. This post examines the case (and an earlier one) and comments on the issues arising.
Purple Parking provides secure parking facilities at most of the UK’s major airports. The case concerned a group of about 20 drivers who drove the shuttle buses and provided car chauffeuring services at the car parks at Heathrow Airport. They were told that they could no longer work if over the age of 67 due to a change in Purple Parking’s insurance policy. The change meant that drivers over the age of 67 were no longer insured to drive. As a consequence, the drivers in question were dismissed. They brought age discrimination and unfair dismissal claims in the Watford Employment Tribunal.
During the litigation, the employees obtained an Order requiring Purple Parking’s insurer, Allianz, to disclose relevant documents. One of the documents disclosed was a memo from Purple Parking’s insurance brokers to Allianz which reportedly stated that:
“The client (Purple) is looking to apply an upper age limit of 65 for employees to the road risks section (excluding directors, spouses,etc)”.
Allianz described this request as being “unusual” and stated that at no point had it required such a limit to the insurance cover. As events turned out, at Purple Parking’s request, the upper age limit of 67 was set.
Shortly after Allianz disclosed the documents, Purple Parking admitted liability for age discrimination and/or unfair dismissal.
According to some sources, the total compensation awarded to the group of successful drivers is in excess of £700,000.
Implications and commentary
The outcome of the Purple Parking case is not surprising given that the employer selected the upper age limit and that the limit was not applied universally. However, it is not the first case to deal with insurance cover and age discrimination.
In Foreman v Oasis Taxis Mansfield Limited (2013), Mr Foreman was originally employed by BN Gibson Limited, pursuant to a contract with Nottinghamshire County Council, to drive children to and from school. On a re-tendering BN Gibson lost the contract and it was awarded to Oasis Taxis.
Mr Foreman met with Oasis Taxis to discuss work. Mr Foreman was aged 77 at the time. There were concerns that his age might pose a problem in relation to insurance cover. This was confirmed by Oasis Taxis’ insurance broker, who said that only drivers under the age of 70 would be insured. Accordingly, Mr Foreman was not offered work as a driver by Oasis Taxis. He brought an age discrimination claim.
The Employment Tribunal found that he had been indirectly discriminated against because of his age. Oasis Taxis had applied a provision, criterion or practice that it would only employ a driver if its current insurers would provide cover for that driver. This put individuals who were over the age of 69 at a disadvantage. Although the Tribunal was satisfied that the aim of the provision, criterion or practice was a legitimate one (namely, to ensure that all drivers had insurance cover), the defence to the claim fell down because only employing drivers whom the current insurers would provide cover for was not a proportionate means of achieving the aim.
The Tribunal found that Oasis Taxis had made no effort to seek insurance cover for Mr Foreman and that, had proper enquiries have been made, insurance cover could have been obtained for Mr Foreman.
The keys points which emerge from the Foreman case are that:
(a) treating employees differently because of their age will be potentially discriminatory unless that treatment can be objectively justified;
(b) If the insurance terms offered by the existing provider are such as to exclude an individual who is above a certain age, the employer will need to “shop around” to see if cover can be obtained elsewhere. However, it should be noted that any additional cost associated with providing that cover may not, on its own, be sufficient to justify differential treatment because of age.
Although Schedule 9 of the Equality Act 2010 contains some specific exemptions from age discrimination in relation to the provision of certain types of insurance benefits, there are potential problems with the wording of the exemptions such that age discrimination claims may still arise in some cases.
For further information about age discrimination, or in relation to any other employment law matter, please contact Nick Sayer or call on on 01223 411421.