The Supreme Court has found that calculating an employee’s pension entitlement based on the employee’s part-time salary (where the employee had been prevented from working full-time due to his disability) was not “unfavourable treatment” under the Equality Act. If the employee been able to work full-time he would not have been entitled to immediate payment of his pension.
The Claimant suffered from Tourette’s Syndrome, obsessive compulsive disorder, depression and other mental health problems. He worked for Swansea University for 13 years – 10 years on a full time basis and 3 years on a part time basis. The reduction in hours was a reasonable adjustment due to his medical conditions. The Claimant took ill-health retirement which meant that he was entitled to receive a pension immediately, without actuarial reduction, based on his final salary. At the time of his retirement, the Claimant was working half of the hours that he had been when he was working full time, and so his pension was half what it would have been if he had retired due to ill-health when he was working full time.
He successfully brought a claim in the employment tribunal (ET) for discrimination arising from disability. The ET found that the failure to base his pension on the full time salary amounted to unfavourable treatment. His disability had resulted in a lower pension than would have been awarded if the Claimant’s disability had not caused him to work part-time.
That decision was appealed by the University which was successful in the EAT, the Court of Appeal and finally in the Supreme Court. The latter found that there was nothing intrinsically unfavourable or disadvantageous about the award of a pension to which the Claimant was only entitled because of his disabilities. If the Claimant had been able to work full time he would not have been entitled to an immediate pension. He would not have been eligible to take his pension until the age of 67. The treatment was therefore not unfavourable.
This case is particularly comforting for employers who offer additional benefits to disabled employees, for example in relation to pension schemes or insurance contracts, as it confirms that it is unlikely that changes to these benefits which result from other reasonable adjustments will be found to be unfavourable treatment.
Williams v Trustees of Swansea University Pension and Assurance Scheme and another