Can a rushed redundancy process to avoid additional pension costs amount to unfair dismissal and age discrimination?

Posted on May 16th, 2023

Yes it can – held the tribunal in Mrs S Millar v The Oak Trust.

Mrs Millar was a school business manager who worked at the Oak Trust until she was made redundant in August 2021.

The Oak Trust was formed in 2017 and comprised three schools. Shortly after the trust’s formation, the trust began to centralise its various office and administrative functions with a view and expectation that multi-academy trusts can lead to efficiencies. Some of the centralised functions where changes were made included strategic finance, procurement, payroll, ICT, premises maintenance and health and safety.

As a result of the centralisation of functions, the school business manager roles changed and some of the strategic elements declined and were replaced with administrative tasks.

Two roles to be deleted

In February 2021, a proposal was brought forward by the Executive Director of Business and HR for a review of the business and operations functions across the trust, to include the school business managers, and to see whether any financial savings could be identified. Following the review, a proposal was made to delete two of the business manager positions at their respective schools along with a finance administrator position with a view to making them redundant at 31 August 2021. The savings annually for the trust were identified as £85,624. The proposal identified that there would be one-off termination costs for the affected staff that were to be paid by their respective schools.

Did not state risk of redundancy

On 23 April 2021, both business managers were invited to a meeting to take place on 4 May 2021, but these invites did not specifically state that they were at risk of redundancy and nor did they enclose the proposals. Mrs Millar accepted that a more general restructure may have been on the cards given that her role had changed, but she was later surprised her role was at risk of deletion.

Request one-to-one meeting

The meeting on 4 May took place but Mrs Millar experienced technical difficulties on the video call and it was arguable that she had not properly heard the proposals. In any event and following the meeting, she wrote to the trust requesting a one-to-one meeting to discuss matters and specifically asked the trust the following:

“I am 55 on 18 September and would like the early pension option without reduction in my benefits. As I am 17 days out, can the trust consider this?”

Pension strain payment

The trust rejected this proposal. Of the two school business managers at the trust, one had already reached the age of 60 at the proposed termination date of 31 August 2021. The reason this is important relates to the pension because the 60-year-old business manager was entitled to receive her pension immediately at the date of redundancy, being over 55 years of age at the time, and without actuarial deduction for early receipt.

Employers in such circumstances are required to top up the pension pot with a ‘strain payment’ in accordance with the Local Government Pension Scheme rules. These costs can be significant depending on the age of the employee and their earnings.

Mrs Millar, on the other hand, would only have been 54 at the proposed termination date and realised that she would miss out on the pension strain cost and her full pension entitlement.

Redundancy proposals approved

By the time the proposals were approved by the trust’s change committee on 20 May 2021, Mrs Millar had not received a one-to-one meeting. She had also been off sick since 10 May for work-related stress.

Asked for process to be restarted

Mrs Millar was served notice of redundancy and offered a meeting to discuss support such as assistance with looking for alternative roles. However, Mrs Millar rejected this meeting offer and asked for the notice to terminate her employment to be formally withdrawn. She argued that the trust had failed to offer her a one-to-one meeting before dismissal was confirmed and had otherwise failed to follow its own process and procedural timetable. She also argued that she had not been given an opportunity to comment on the actual proposals and asked for the process to be re-started.

Appeal rejected

The trust saw Mrs Millar’s request for the process to be restarted as a cynical attempt to ensure she received her pension strain. The trust did not accept the appeal or re-start the process.

Mrs Millar presented claims of age discrimination and unfair dismissal.


The employment tribunal held that the claims succeed. In relation to the redundancy consultation process, the tribunal stated as follows at paragraph 34 of its judgment:

‘The criticism we make falls into two broad categories. Firstly, even if the process had run as it was envisaged to run, we consider that it was not a process which provided for meaningful consultation. Secondly, this defective process was made worse by the elements which went wrong in the way that it was actually applied to Mrs Millar.’

The tribunal concluded that the trust pursued an ‘accelerated timetable’ in order to avoid the enhanced pension strain and liability. That accelerated timetable and failure to re-start the process was influenced by her age and all the tribunal had to consider was whether ‘any part’ of her age played a part in the decision to not re-start the process.

A remedy hearing has been set to determine the compensation for Mrs Millar in relation to the above.


The accelerated timetable in this case meant that various procedural defects occurred with the consultation process, ultimately leading to a finding of unfair dismissal. Had Mrs Millar’s age not been a factor in the decision to restart the process, the trust could have potentially rectified some of those earlier errors in consultation, avoiding the unfair dismissal claim and age discrimination claim. Further consultation may have also opened up discussion about ways to avoid redundancy, such as the consideration of suitable alternative roles. This may have resulted in Mrs Millar keeping a post at the trust and the trust avoiding both her redundancy payment and any potential pension strain.

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