Disability Discrimination

Is the award of an enhanced pension on medical retirement "unfavourable treatment"? under the Equality Act 2010, if the amount is calculated based on part-time salary because the employee is working part-time as a result of a disability?

The UK Supreme Court announced its ruling on Williams v Trustees of Swansea University Pension on 17th December 2018.

It held that the award calculation did not amount to ‘unfavourable treatment’.

You can read the Supreme Court’s press release on the judgement here, however we’ve provided a summary below.

Pension adjustments for ill-health early retirement

The Claimant was disabled by virtue of suffering from Tourette's syndrome and other conditions. His employer reduced his hours to part time as a reasonable adjustment.  He applied for ill health early retirement, which was granted when he was aged 38.

The pension scheme entitled him to a lump sum and annuity, payable immediately and with no actuarial reduction for early receipt, based on accrued benefits, as well as an enhancement calculated based on his salary at the time of retirement, as if he had continued to work to age 67.

He claimed that the calculation of his enhanced benefit amounted to ‘unfavourable treatment’ since it was based on his part time salary and he was only working part time because of his disability.

The original tribunal agreed, however the EAT and Court of Appeal did not. The Supreme Court unanimously dismissed the appeal.

Definition of Unfavourable Treatment of Disabled Workers

The central issue for the Supreme Court is the meaning of “treats…unfavourably”

Section 15(1) of the 2010 Act provides that:

A person (A) discriminates against a disabled person (B) if:

a) A treats B unfavourably because of something arising in consequence of B’s disability, and;

b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim.

Reasons for the court's decision

We have read the judgement and taken the below extract that summarises the reason for the Supreme Court’s decision.

First, it is necessary to identify the relevant treatment to which section 15 of the 2010 Act is to be applied. In this case it was the award of a pension.

There is nothing intrinsically unfavourable or disadvantageous about that. The appellant’s argument depends on an artificial separation between the method of calculation and the award to which it gave rise.

The only basis on which Mr Williams was entitled to any award at this 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 those circumstances the award was not in any sense “unfavourable”.

 

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