Justifying Indirect Discrimination - The Subtle But Important Difference Between 'Costs' And 'Costs Plus'

It has long been established that an employer cannot justify discriminatory treatment solely because to eliminate such treatment would involve increased costs. Cost-saving alone without regard to other factors or aims does not justify a discriminatory provision, criterion or practice (PCP). However, while cost alone cannot justify a discriminatory act, cost plus some other factor (the so-called 'costs plus' approach) may do so.

Is an 'absence of financial means' capable of being the 'plus' factor justifying indirect age discrimination or is it still just 'cost'? This is the question the Court of Appeal has now considered in Heskett v Secretary of State for Justice. The Court has held that although saving or avoiding cost cannot alone justify indirect discrimination, an employer's need to reduce expenditure, including staff costs, in response to financial constraints can constitute a legitimate aim for the purposes of the justification test.