An appeal has been allowed against a ruling that found a former technician had been discriminated against after receiving half of the pension he would have been entitled to had he been working full-time at the time of his ill-health retirement.
In the case of the Trustees of Swansea University Pension and Assurance Scheme (Swansea) vs Andrew Williams, the Employment Appeal Tribunal (EAT) found that the original case decision could not stand, and therefore allowed the appeal and remitted the case to a fresh tribunal for a complete rehearing.
Williams was a full-time technician at the university before falling ill and taking early retirement at the age of 38 in June 2013. He has Tourette’s syndrome, depression and obsessive compulsive disorder, which rendered him incapable of fulfilling his post. Neither party disputed his status as a disabled employee.
Under the conditions of the pension scheme applicable to Williams, employees are entitled to a pension on retirement at the age of 67, unless the retirement is due to ill health. In the case of the latter, employees are entitled to both the immediate payment of the pension and an enhanced pension without actuarial reduction, as if they had continued to work to retirement age on their current salary.
Prior to taking early retirement, Williams’ hours were temporarily reduced to 17.5 per week in light of his disability. No permanent change to his contractual hours (35 per week) was made.
As Williams’ hours and pay had reduced by half, the enhanced pension he received was also halved.
At the EAT, its president Mr Justice Langstaff allowed the appeal and remitted the case to a new tribunal on the basis that: “Without knowing what is unfavourable about the conduct of which complaint is made, and why it is so, a tribunal is in no position to draw the balance between its discriminatory effect and the legitimate aim it is said to serve.”
In a statement from law firm Didlaw, which represented Williams during Swansea’s appeal, director and senior solicitor Karen Jackson said: “Having eagerly awaited judicial guidance and the meaning of unfavourable, we must now admit to being disappointed. The EAT appears to suggest that perhaps the provision is not quite as wide as we might have anticipated.”
Sheila Fahy, professional support lawyer counsel in Allen & Overy’s employment practice, said: “In the judge’s view, it is not ‘unfavourable’ treatment simply because it can be argued that the claimant could have been in a more advantageous position. There has to be a hurdle, a particular difficulty or disadvantage to succeed in this type of claim.
“The EAT also noted that if an employer was obliged to agree to a reduction in hours as a reasonable adjustment under the Equality Act, it should not, except perhaps in exceptional circumstances, be required to continue paying the employee as if there had been no such reduction in hours.”
Gemma Parker, senior professional support lawyer at Linklaters, added: ”In this case, there is a distinction between ‘less favourable treatment’ and ‘unfavourable treatment’ such that a person may not have been treated unfavourably just because they could have been treated more favourably.
”The employee was entitled to generous benefits under the ill-health retirement scheme. It was not automatic that he had been treated unfavourably for a reason arising from his disability just because he would have been entitled to a higher payment had the university not reduced his working hours prior to retirement, at his request, as a result of his disability.
“The EAT’s judgment suggests that employers should be able to make reasonable adjustments for employees without fear that any negative consequential impact arising from such an adjustment [in the present case the reduction in ill-health retirement benefits] will amount to unfavourable treatment arising from a disability. An alternative conclusion would put employers in a very difficult position.”
Helena Davies, professional support lawyer at Hogan Lovells, said: “The fact that if the claimant’s working hours had not been reduced because of his disability and he had been employed full-time at the time of his dismissal, his enhanced ill-health pension would have been double that actually provided, was not unfavourable treatment because of his disability.
”It is easy to see why the EAT reached this conclusion on the particular facts of this case. It would clearly have been illogical if the reduction in hours requested by the claimant, and which the employer was almost certainly required to make under the Equality Act provisions imposing a duty to make reasonable adjustments, was also unfavourable treatment.
”What has to be shown to be justified is the outcome, not the process by which it was achieved. Although evidence that other means of achieving a legitimate aim had been considered and rejected may help with justification, it is not a requirement.”
