How far does an employer need to go to avoid a discrimination arising from disability claim?

In Williams v The Trustees of Swansea University Pension & Assurance Scheme and another [2018] UKSC 65, the Supreme Court was required to decide whether an already advantageous policy on pensions needed to be applied even more advantageously in order to avoid a claim for discrimination arising from disability.

The facts

Mr Williams worked for Swansea University, he suffered from a number of conditions which meant that he was disabled. The University made a series of adjustments during his 13 years’ service to his working hours, at his request, which included reducing his role from full-time to part-time.

Despite these adjustments, Mr Williams became unfit to work and qualified, under the Pension Scheme Rules to take ill-health early retirement pension. The issue was the rate at which the pension should be paid. Was it, as Mr Williams contended, full-time pay or, as the University argued, a pension based upon his part-time hours.

Mr Williams argued that he was only working part-time hours because of his disability as part of a temporary phased return to work and he remained on a full-time contract. His representative argued that if Mr Williams was not disabled, then he would have been able to work full-time and so the ill-health early retirement pension should be based on full-time hours.

The outcome

Mr Williams was successful in his claim for discrimination arising from disability at first instance. The tribunal held that, in deciding to use the part-time figure, Swansea University were subjecting Mr Williams to unfavourable treatment in consequence of his disability and that this treatment was not justified as a proportionate means of achieving a legitimate aim.

However, this was overruled by the Employment Appeal Tribunal, the Court of Appeal and the Supreme Court.
Lord Carnwath, who gave the leading judgment in the Supreme Court, held that while Mr Williams’ representatives had provided helpful comments at the tribunal on how low the threshold could be for a “detriment claim”, in comparison to unfavourable treatment, it was not necessary to look at these distinctions here. It was more appropriate to consider:

1. What was the relevant treatment?
2. Was this treatment unfavourable to Mr Williams?

In this case, if Mr Williams was not disabled, he would not be entitled to an ill-health early retirement pension. Instead, he would be expected to work until the normal pension age before he would qualify. As a result he was being treated more favourably than someone without a disability by being allowed to take his pension early so this could not be said to amount to unfavourable treatment.

What does this mean for employers?

The outcome is good news for employers whose pension schemes provide for ill-health early retirement as it appears to entrench the view that where an employee has reduced their hours prior to any application to take ill-health early retirement that the employee is only entitled to be compensated at the rate of pay they were receiving at that time. Whilst this might seem harsh on the employee, they are receiving a significant benefit by being permitted to draw a pension early, on what will usually be favourable terms.

For those whose pension schemes provide this type of benefit, there may well be attempts by employees to extend the period of time for which they work full-time and arguments may arise over what is and is not a reasonable adjustment, particularly where an employee suffers from a progressive condition and an ill-health early retirement is a likely outcome.

On a broader basis, it gives helpful guidance for employers when dealing with a disabled employee how the statutory test will be approached by Tribunals going forward.