In Williams v The Trustees of Swansea University Pension and Assurance Scheme and Swansea University the Supreme Court confirms a common-sense approach to the meaning of ‘unfavourable treatment’ under section 15 of the Equality Act 2010.
Williams had a disability under the Equality Act. He had originally worked full-time, but was working part-time when he ceased to be able to work any longer. He then received an ill-health retirement pension at the age of 38. This consisted of a lump sum and annuity, calculated on his actual salary at the relevant times, and an enhancement to the lump sum and annuity, calculated on his actual salary at the date of retirement.
Williams disputed the calculation of the enhancement. He successfully argued at the Employment Tribunal (ET) that he was working part-time only because of his disability and the calculation constituted unfavourable treatment, which could not be justified.
The trustees and University successfully appealed to the Employment Appeal Tribunal (EAT) and successfully defended Williams’ appeals to the Court of Appeal and Supreme Court. The Court of Appeal ruled that the undisputed facts of the case could not amount to ‘unfavourable treatment’ and the Supreme Court upheld this finding.
The Supreme Court identified two simple questions. What was the relevant treatment and was it unfavourable to the claimant? It cautioned against ‘an artificial separation’ between the method of calculation of an award and the award to which the calculation gives rise. Here, the treatment was the award of a pension, and the Supreme Court held there was nothing intrinsically unfavourable or disadvantageous about that. If Williams had not been disabled, he would have worked full-time and not been entitled to any pension at all until age 67.
The decision provides reassurance for employers with pension schemes that offer certain benefits in cases of disability, as it makes it less likely that the schemes will now be regarded as giving rise to unfavourable treatment.
Matthew Smith is employment partner at Blake Morgan, which acted for the trustees and University