Fasano v Reckitt Benckiser Group PLC & Anor [2024] EAT 7

Appeal against a decision dismissing the Claimant's claim for indirect age discrimination. Appeal dismissed.

The Claimant was a senior employee of the Second Respondent, a wholly-owned subsidiary of the First Respondent. As such he was eligible to participate in the First Respondent’s long term incentive plan (LTIP) which had been approved by their shareholders and was administered by their remuneration committee (Remco). The Claimant was awarded shares and options under LTIP for 2017 whose vesting was dependent on the performance of the First Respondent’s shares over the three years 2017-2019. On 30/6/19 he retired as a “good leaver” from his employment with the Second Respondent. Under the LTIP he remained entitled to a pro-rated amount of the 2017 award that would ordinarily vest at the end of 2019. In 2019, it was clear that the performance of the First Respondent's shares was such that the terms of the 2017 award had to be changed, in effect benefitting those employees who were still in post but meaning that the Claimant, as he had already left employment, received nothing. He claimed age discrimination at the ET but lost, the ET concluding that the requirement that LTIP participants had to be employed on 18/9/19 in order to benefit from the amended terms was a “PCP” for the purposes of s19 of EqA 2010; that PCP put people over 57 at a particular disadvantage compared with those under 57; it put the Claimant at that disadvantage; but it was a proportionate means of achieving the legitimate aim of retaining staff and was therefore justified. It also concluded that the First Respondent was acting as agent for the Second Respondent when providing the LTIP for the Second Respondent’s employees and amending its terms and both companies were therefore potentially liable under ss 109 and 110 of EqA 2010. The Claimant appealed and the Respondent also challenged the issue relating to the First Respondent acting as agent for the Second Respondent.

The EAT dismissed the Claimant's appeal. It agreed that the ET was in error in relation to the PCP; although the changes to the LTIP were a means of achieving the legitimate aim of retaining staff, it was the PCP which had to be justified and the PCP itself was not a means (let alone a proportionate means) of achieving the legitimate aim, since the employees who were excluded by the PCP had already left employment and so could not be retained. However, the agent point was perverse; that decision required the ET to find that the First Respondent had been authorised by the Second Respondent and that it was acting on behalf of the Second Respondent in relation to the LTIP and there was no proper basis for such findings.


Published: 21/02/2024 13:37

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