In Williams v The Trustees of Swansea University Pension & Assurance Scheme and another, the Court of Appeal (CA) considered whether advantageous treatment of a member, which could have been more advantageous, could constitute unfavourable treatment within the meaning of section 15 of the Equality Act 2010.
Under section 15(1) of the Equality Act 2010 (the Act), “discrimination arising from disability” in the pensions context occurs where both:
- an employer treats a scheme member unfavourably because of something arising in consequence of the member's disability; and
- the employer cannot show that the treatment is a proportionate means of achieving a legitimate aim.
Until the employment appeal tribunal (EAT) decision in this case, there was no authority on the meaning of unfavourable treatment in this context. Nevertheless, tribunals have tended to treat it in a similar way to the concept of detriment, as understood in the context of the Act.
“Detriment” is not defined in the Act and tribunals have looked to the meaning of detriment established by case law. In Shamoon v Chief Constable of the Royal Ulster Constabulary , the House of Lords held that a worker suffers a detriment if a reasonable worker would or might take the view that they had been disadvantaged in the circumstances in which they had to work. An “unjustified sense of grievance” is not enough.
Facts of the case
Mr Williams suffered from Tourette's Syndrome, obsessive compulsive disorder, depression and other psychological problems. He worked for Swansea University for approximately 13 years, the first ten of which were full-time. In the last three he reduced his hours by half, as a result of reasonable adjustments agreed by the University. Eventually, his medical conditions made him incapable of continuing work and he took ill-health retirement at the age of 38. Under the University's pension scheme rules, he was entitled to an accrued pension, as well as to an enhanced pension based on his final salary at retirement (both without actuarial deduction).
Mr Williams successfully brought a claim for discrimination arising from disability under section 15 of the Act. The employment tribunal held that the failure to base his enhanced pension on the full-time salary he had received prior to his reduction in hours amounted to unfavourable treatment because of something arising in consequence of his disability, and that the treatment was not justified. In reaching this conclusion, the tribunal accepted that the meaning of unfavourable treatment could be equated with that of detriment.
The University successfully appealed to the EAT, which held that unfavourable treatment does not equate to the concept of detriment. The EAT held that treatment which was advantageous could not be said to be unfavourable merely because it could have been even more advantageous. To be treated unfavourably, a person would need to show that he was not in as good a position as others generally would be. The EAT accordingly remitted the case to a freshly constituted. Mr Williams appealed against the EAT's decision.
In the CA, Mr Williams claimed that:
- his enhanced pension was based on part-time salary rather than full-time. This was to his disadvantage and so amounted to unfavourable treatment;
- the disadvantage occurred because he had had to reduce his hours. It was agreed that this had arisen in consequence of his disability;
- he had therefore suffered discrimination arising from disability (subject to justification arguments).
The CA unanimously agreed with the EAT and dismissed Mr Williams’ appeal.
The CA commented that only people who are disabled within the meaning of the Act would benefit from the ill-health retirement enhanced pension offered by the University. It followed that Mr Williams' case involved a comparison with other disabled people, whose disabilities had necessitated a sudden retirement, with no intervening period of part-time working.
With this in mind, the CA stated that the critical question was “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 section 15 [of the Act]?” The CA held that it does not.
In confirming its agreement with the EAT's decision, the CA illustrated what it considered to be the flaws with Mr Williams' case. For example, applying the logic of his case would mean that the following people would also potentially have section 15 claims:
- a disabled person who only applied for a part-time role because of their disability (but who would otherwise work full-time if they were not disabled) and received a part-time salary accordingly. In the CA's view, it could not have been Parliament's intention to throw the onus on employers to justify the payment of part-time pay for part-time work in these circumstances;
- a disabled person who took ill-health retirement having initially worked full-time for, say, only six months, but who reduced to part-time because of their disability and then continued to work those part-time hours for, say, the next 13 years. The CA commented that it would be surprising if such a person was entitled to an enhanced pension based on full-time pay.
The only aspect of the EAT's judgment with which the CA disagreed was the decision to remit the case to a tribunal, instead substituting a finding of no discrimination.
The main practical point of the judgment is that treatment which is advantageous to the member will not amount to unfavourable treatment (under the Act) merely because the individual considers that he could have been treated even better.
This is a significant judgment as it is the first time the CA has considered what is meant by being treated “unfavourably” under section 15 of the Act. Although it does not say so expressly, the CA endorsed the EAT's view that “unfavourably” in the context of section 15 of the Act does not equate to the concept of detriment. But what is the difference between the two?
Under the reasoning in Shamoon, disadvantage is considered from the perspective of the reasonable worker, noting that an unjustified sense of grievance is not sufficient. However, it is arguable that many a worker would feel as aggrieved as Mr Williams if they found themselves in a similar situation and it might be difficult to argue that such a worker would be unjustified in feeling that way.
Nevertheless, the House of Lords’ Shamoon decision is binding on both the EAT and the CA. In advancing the view that the unfavourable treatment test under section 15 of the Act is a distinct test (and one which does not involve the views of the reasonable worker) the lower courts are able to sidestep any potential conflict with the House of Lords’ view.
We understand that Mr Williams is seeking permission to appeal to the Supreme Court.
View the judgment.