What is unfavourable treatment in discrimination?

The Supreme Court (“SC”) has clarified what amounts to “unfavourable treatment” for the purposes of a claim for discrimination arising from disability under section 15 of the Equality Act 2010 (“EA”).

In Williams v Trustees of Swansea University Pension and Assurance Scheme the SC held that a disabled employee who was entitled to a pension because of his disabilities was not treated “unfavourably” for the purposes of s15 because his pension was based on his final part-time salary.

Mr Williams worked for Swansea University until retiring at 38 years old due to ill-health caused by his disabilities, including Tourette’s syndrome. In the 12 months prior to his employment terminating Mr Williams had reduced his working hours (and therefore salary) by half, having requested reasonable adjustments of his employer which were granted.

Mr William’s pension scheme entitled him to a lump sum and annuity, payable immediately and with no actuarial reduction for early receipt, based on accrued benefits, in addition to an enhancement. Since the enhancement was calculated as if he had continued to work until he was 67 years old by reference to his final salary, Mr Williams therefore received only 50% of the pension to which he would have been entitled had he retired a year earlier, before his working hours were reduced.

Arguing that basing his pension on his final part-time salary rather than his previous full-time salary amounted to discrimination arising from his disability contrary to s15 EA, Mr Williams brought a claim against the University and the pension scheme trustees. At first instance, the employment tribunal (“ET”) agreed that Mr William’s disability “caused him to have a lower pension than he would have done had his disability not caused him to work part-time“, and that the pension scheme trustees had not established that such unfavourable treatment was objectively justified.

The Employment Appeal Tribunal (“EAT”), Court of Appeal (“CA”) and Supreme Court disagreed, however. Overturning the decision of the ET, the EAT found the conclusion that Mr William’s had suffered unfavourable treatment “manifestly perverse”. On appeal, the CA and SC agreed with the EAT.

Lord Carnwath held that describing the amount of the pension as unfavourable treatment would be to introduce an artificial separation between the method of calculation and the award to which it gave rise. Since Mr Williams was only entitled to a pension at all because of his disabilities (had he been able to work full time he would have enjoyed no immediate right whatsoever to a pension) it could not be said that he had suffered unfavourable treatment.