The Supreme Court has considered whether the award of an enhanced pension due to medical retirement, based on a part-time salary, is unfavourable treatment due to disability.

Williams v The Trustees of Swansea University Pension & Assurance Scheme and another, [2018] UKSC 65

Facts

Mr Williams suffered from a number of psychological problems, including obsessive compulsive disorder and depression. He worked full time for a period of ten years, following which his hours were reduced as a result of reasonable adjustments agreed by the University. After three years of working part-time on a reduced salary, he took ill-health retirement. Under the rules of the pension scheme, he was entitled to his accrued pension and an enhanced pension based on a period of deemed pensionable service. These were calculated on the basis of his actual final (part-time) salary at retirement. 

Mr Williams brought a claim for discrimination arising from disability under section 15 Equality Act 2010. The employment tribunal agreed that the failure to base his enhanced pension on his full time salary amounted to unfavourable treatment because of something arising in consequence of his disability, and that the treatment was not justified.

The University successfully appealed to the EAT, which held that advantageous treatment (the award of the enhanced pension) could not be said to be unfavourable merely because it could have been even more advantageous. The Court of Appeal agreed with the EAT’s finding.

Supreme Court decision

The Supreme Court has dismissed Mr Williams’ appeal. It held that there was nothing intrinsically ‘unfavourable’ or disadvantageous about the award of a pension. Mr Williams was only entitled to be awarded the pension by reason of his disabilities; if he had been able to work full time, the consequence would have been no immediate right to a pension at all rather than a bigger pension entitlement.

Consequences

This decision confirms the principle that in general, advantageous treatment cannot be unfavourable (and, therefore, discriminatory), even if it could have been more advantageous. In making a reasonable adjustment by reducing a disabled employee’s working hours, they will not generally be entitled to be paid a full time salary nor be entitled to be paid a pension based on full time earnings. However, this will depend on what a tribunal considers to be ‘reasonable’ in all the circumstances of the case. 

The content of this article is for general information only. For further information please contact Liz Stevens or a member of Birketts’ Employment Law Team.

This article is from the January 2019 issue of Employment Law Update, our monthly newsletter on employment legislation and regulation. To download the latest issue, please visit the newsletter section of our website. Law covered as at January 2019.

To keep up-to-date with the latest news, legal updates and seminar information, please register and select the areas that are of interest to you.