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Trustees of Swansea University Pension & Assurance Scheme v Williams

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Last updated 19th July 2019.

The claimant was entitled to an early pension only because of his disability, but it was less than it would have been for a disability which came on suddenly. It was less because he had reduced his working hours because of his disability. The Supreme Court held there was no ‘unfavourable treatment’ within s.15 Equality Act 2010.

Supreme Court, 2018. Full judgment: www.bailii.org/uk/cases/UKSC/2018/65.html

Facts

The claimant took ill health retirement due to his disability. He was entitled under the pension scheme rules to an enhanced pension as if he had continued working to normal retirement age (as well as a pension based on work to date). However, due to his disability his hours had reduced to 50%. His enhanced pension under the scheme rules was based on final salary so that was also reduced by 50%.

The pension scheme rules had the effect that a person who has to leave work suddenly because of their disability, eg due to a stroke, gets a 100% enhanced pension, whereas a more gradual disability which leads initially to part-time working only gets the reduced pension, as happened to the claimant.

Held by the Supreme Court: there was no unfavourable treatment within s.15 EqA.

Arguments

The claimant cited the Employment Code on “What is ‘unfavourable treatment’?”:

5.7  For discrimination arising from disability to occur, a disabled person must have been treated ‘unfavourably’. This means that he or she must have been put at a disadvantage. Often, the disadvantage will be obvious and it will be clear that the treatment has been unfavourable; for example, a person may have been refused a job, denied a work opportunity or dismissed from their employment. But sometimes unfavourable treatment may be less obvious. Even if an employer thinks that they are acting in the best interests of a disabled person, they may still treat that person unfavourably.”

The reference in that passage to “disadvantage” took the claimant’s argument to an earlier passage dealing with the word “disadvantage” as it appears elsewhere in the Equality Act (s.19 on indirect discrimination):

4.9 ‘Disadvantage’ is not defined by the Act. It could include denial of an opportunity or choice, deterrence, rejection or exclusion. The courts have found that ‘detriment’, a similar concept, is something that a reasonable person would complain about – so an unjustified sense of grievance would not qualify. A disadvantage does not have to be quantifiable and the worker does not have to experience actual loss (economic or otherwise). It is enough that the worker can reasonably say that they would have preferred to be treated differently.

The claimant argued that those passages show that words such as unfavourably, disadvantage, and detriment are similar in effect. He argued the last sentence also supports a test which is not purely objective; regard may be had to what is reasonably seen as unfavourable by the person affected.

The Pension Scheme argued that the “objective” test was to be contrasted with “the mixed subjective/objective test” held to apply when determining whether an individual has been subjected to a “detriment” under s.39 Equality Act, that is whether the treatment is “of such a kind that a reasonable worker would or might take the view that in all the circumstances it was to his detriment?”. It also submitted though that whichever test is adopted the conclusion is the same. The claimant had not been treated unfavourably. If he had not been disabled, and had been able to work full time, his pension would not have been calculated on a more favourable basis, but rather he would have no entitlement to any pension at all until his normal retirement date.

Supreme Court decision

The Supreme Court said:

  • As submitted by the claimant, in most cases (including the present) little is likely to be gained by seeking to draw narrow distinctions between the word “unfavourably” in s.15 and analogous concepts such as “disadvantage” or “detriment” found in other provisions, nor between an objective and a “subjective/objective” approach.
  • While the passages in the Code of Practice cannot replace the statutory words, they do provide helpful advice as to the relatively low threshold of disadvantage which is sufficient to trigger the requirement to justify under s.15.

However the passages in the Code did nothing to overcome the central objection to the claimant’s case, as now formulated. It was necessary first to identify the relevant “treatment” to which the s.15 is to be applied. In this case it was the award of a pension. There was nothing intrinsically “unfavourable” or disadvantageous about that.

The claimant’s formulation depended on an artificial separation between the method of calculation and the award to which it gave rise. The only basis on which the claimant was entitled to any pension at that time was by reason of his disabilities. Had he been able to work full time, the consequence would have been, not an enhanced entitlement, but no immediate right to a pension at all. In these circumstances the award of the pension of that amount and in those circumstances was not in any sense “unfavourable”, nor (applying the approach of the Code) could it reasonably have been so regarded.

Court of Appeal

The Supreme Court said it was substantially in agreement with the reasoning of the Court of Appeal, so it is also helpful to look at that court’s reasoning.

The Court of Appeal (bailii.org) said there would be surprising results if working reduced hours because of a disability, leading to a benefit being reduced, were enough to establish unfavourable treatment:

  • Say a disabled claimant applies for and secures a part time job because that is as much as he can manage, but would otherwise have worked full time. He gets a part time salary. It can hardly have been Parliament’s intention that he should be able to claim unfavourable treatment under s.15 so as to throw the onus onto the employers to establish that the part time salary he receives is a proportionate means of achieving a legitimate aim.
  • Similarly it would be remarkable if he could maintain an entitlement to the same retirement pension as he would have received had he worked full time throughout his employment. (The claimant was disposed to accept that in those circumstances there would be no prima facie case of unfavourable treatment within s 15.)
  • Suppose one changes the facts slightly. A disabled person applies for a full time job with the University and works full time for (say) six months. At this point, he realises that the full time job is too onerous for him and asks the University to reduce his working hours to 50% of full time salary. The employers agree and for the next 13 years he works 50% of full time working hours, before becoming permanently incapacitated and taking ill health retirement. It would be very surprising, said the Court of Appeal, if on those facts he was entitled to a pension as if he had worked full time throughout his employment. However the only difference between this and the previous example is that for his first few months in the job he tried full time working but found that he could not manage it.
  • Also different pension scheme rules on how far career average versus final salary is used on ill health retirement might be better or worse for particular disabled people depending on their past career (para 47 of judgment).

The Court of Appeal said really the claimant here was seeking to argue that even though he is treated advantageously, it is enough that his treatment is less favourable than that of a person with a different disability. That is not enough:

48. [The claimant’s] argument begins by treating “unfavourable” as not requiring any comparator but in reality it does depend on a comparator, namely another disabled member of the Scheme with a different medical history.

49. No authority was cited to us to support the view that a disabled person who is treated advantageously in consequence of his disability, but not as advantageously as a person with a different disability or different medical history would have been treated, has a valid claim for discrimination under s 15 subject only to the defence that the treatment was a proportionate means of achieving a legitimate aim. If such a claim were valid it would call into question the terms of pension schemes or insurance contracts which confer increased benefits in respect of disability caused by injuries sustained at work, or which make special provision for disability caused by one type of disease (for example cancer). The critical question can be put in this way: whether treatment which confers advantages on a disabled person, but would have conferred greater advantages had his disability arisen more suddenly, amounts to “unfavourable treatment” within s 15. In agreement with the President of the EAT I would hold that it does not.

My comment

The Supreme Court gave little general guidance on the meaning of ‘unfavourable treatment’ in s.15. It did show a reluctance to make narrow technical distinctions, and said there is a relatively low threshold of disadvantage.

It decided essentially that the claimant had been treated favourably rather than unfavourably. Without the disability he would have got no pension at all at that stage, and you could not “artificially” separate out the method of calculation as being ‘unfavourable’.

The Court of Appeal adds helpful clarification that it is not enough that an advantage is less favourable than it would be for someone with a different disability or different medical history. Also it was concerned about the practical consequences of a broader meaning of ‘unfavourable treatment’.

Since there was no unfavourable treatment in this case, the pension scheme did not have to show that its scheme rules on this met the objective justification test.

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