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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Williams v The Trustees of Swansea University Pension & Assurance Scheme & Anor [2017] EWCA Civ 1008 (14 July 2017) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2017/1008.html Cite as: [2018] ICR 233, [2017] EWCA Civ 1008, [2017] Pens LR 19, [2017] WLR(D) 476, [2018] ELR 142, [2017] IRLR 882 |
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CIVIL
DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE LANGSTAFF, PRESIDENT
UKEAT/0415/14/DM, [2015] UKEAT 0415_14_2107
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE BRIGGS
and
LORD JUSTICE BEAN
____________________
ANDREW WILLIAMS |
Appellant |
|
- and - |
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(1) THE TRUSTEES OF SWANSEA UNIVERSITY PENSION & ASSURANCE SCHEME (2) SWANSEA UNIVERSITY |
Respondent |
____________________
Keith Bryant QC and Saul Margo (instructed by Blake Morgan LLP) for the Respondent
Hearing date: 13 June 2017
____________________
Crown Copyright ©
Lord Justice Bean :
The Facts
The University's 2008 pension scheme
Benefits accrued as a result of actual pensionable service up to the date of ill health retirement are paid without any actuarial reduction for early receipt;
Benefits are then enhanced on the basis of salary at actual retirement date but also in respect of a further period of deemed pensionable service from actual retirement date to NPD, again with no actuarial reduction for early receipt.
"Subject to sub-rules 15.3 and 15.6 and the GMP Model Rules, a Member who has completed at least two years' Pensionable Service who retires from Service at any time before his Normal Pension Date as a result of Incapacity, may be provided with an immediate annual pension if the Trustees and the Principal Employer so determine. The pension will be equal to the Member's Scale Pension which would have been payable to him had the date of his actual retirement been his Normal Pension Date, calculated on his Final Pensionable Salary at the date of his actual retirement and his Pensionable Service up to his Normal Pension Date."
Accrued benefit Enhancement Total Annual pension: £5,094.73 + £4,921.19 = £10,015.92 Lump sum: £6,306.28 + £14,763.57 = £21,069.85
The annual pension will be index-linked for life.
Section 15(1) of the Equality Act 2010
"A person (A) discriminates against a disabled person (B) if-
a) A treats B unfavourably because of something arising in consequence of B's disability, and
b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim."
i) Had the claimant been treated unfavourably?
ii) If so was that because of something arising in consequence of his disability?
iii) If so could the Respondents show that the treatment was a proportionate means of achieving a legitimate aim?
It was not in dispute that if the answer to the first question is that the claimant had been treated unfavourably then that was necessarily because of something arising in consequence of his disability. Only the first and third questions were live issues.
The decision of the employment tribunal
"22. The first point of dispute between the parties is whether the claimant has or has not been treated unfavourably within the meaning of Section 15. The parties are agreed that in broad terms Section 15 of the Equality Act 2010 was enacted to reverse and meet the difficulties caused by the well known decision in London Borough of Lewisham v Malcolm [2008] IRLR 700. The mechanism by which Parliament elected to deal with the perceived problem was in part to remove the requirement for there to be a comparator; thus the section requires "unfavourable" treatment and not less favourable treatment. The question is therefore, what does "unfavourable" mean in this context; and how can it be judged if someone has been treated unfavourably unless a comparison with some other individual or other factual circumstance, whether hypothetical or actual is made? If some form of comparison is required, what is it, given that the section has apparently removed the need for any comparative basis for assessment? Fundamentally is a comparison to establish unfavourable treatment permissible even if it is not required? The parties are agreed that there is no authority to assist us and that the point is as far as the best researches of both parties have been able to elicit, a novel one.
23. The claimant submits that the analysis of this problem is simplicity itself:-
"There is no statutory definition, however there is considerable case law establishing that unfavourable treatment/"detriment" has a very broad meaning, including merely "putting at a disadvantage" and would obviously include any financial or economic disadvantage."A simple reasonable and logical analysis of the pension rules leads to the inevitable realisation that a person who retires suddenly following a heart attack or stroke would receive their deemed years of service at their full time salary, whilst a disabled employee who before retiring is forced to work part-time due an increasing disability only receives their deemed years of service at their part-time salary. The disabled employee is consequently at a substantial financial disadvantage.
24. The claimant in essence submits that one only has to look at the scheme rules to discover in the disadvantage suffered by the claimant and therefore the unfavourable treatment. Because of his disability he was working part time for the final years of his employment. When that position was no longer sustainable and he retired due to ill health, he received less enhanced benefit under the scheme than he would have received had he been working full time immediately prior to taking ill health retirement. He has therefore been treated unfavourably in that he has received less enhanced benefit that he would otherwise have received and that has arisen as a consequence of his disability.
25. The respondent does not accept this analysis. Mr Bryant QC submits that whilst there is no longer a requirement for a comparator, that it is a useful exercise to consider what would have been the position in the predecessor legislation of the pre Malcolm understanding of the nature of the appropriate comparator as was set out in the well known case of Clark v Novacold Ltd (1999) IRLR 318. He submits that under that formulation the comparator to determine whether the claimant had been treated less favourably would have been a non disabled employee who remained at work and had not retired through ill health. He submits that self evidently the claimant would not have been treated less favourably than that hypothetical employee. He had not been deprived of pay or some other employment benefit which he had previously been receiving; rather he had been given immediate access to enhanced pension benefits to which other non-disabled employees do not have access.
[Mr Bryant submitted that] the key points include the following:-
a) C has been granted ill health retirement benefits which entitle him to receive pension benefits nearly 30 years before his NPD.b) His entitlement includes benefits accrued up to retirement date without any reduction for early receipt. The lack of actuarial reduction adds significantly to the value of the benefits.c) His entitlement also includes an enhancement to his benefits for the period of deemed service from actual retirement date to NPD; that involves nearly 30 years deemed Pensionable Service and again the immediate receipt of benefits without any reduction for early receipt.d) The effect of the enhancement is more or else to double C's annual pension and more than triple his lump sum.e) In overall financial terms, the enhancement to C's benefits is valued at some £335,000 over and above the value of the benefits already accrued by C.
26. Accordingly Mr Bryant submits that there has been no unfavourable treatment in that upon ill health retirement the claimant has received very substantial benefit which would not be available to a non disabled employee. Whilst the section does not require a comparator the exercise carried out above demonstrates that there can be no unfavourable treatment.
…
32. Our conclusion is that the claimant is correct and that he has of necessity been treated unfavourably in that his disability has caused him to have a lower pension that he would have done had his disability not caused him to be working full time. In essence we accept the claimant's submission set out above that the disadvantage is apparent from the scheme itself. The contention that there is no unfavourable treatment in our judgment rests essentially on the submission that the scheme is a particularly generous one. However fact that the scheme is particularly generous and that the claimant is in absolute terms much better off than he might have been in a differently constructed scheme, does not alter the fact in our judgment that he has been treated unfavourably in that he has been placed at a disadvantage in the application of the rules of this particular scheme.
33. As set out above it is accepted that if we find, as we do, that there has been unfavourable treatment it arises in consequence of the claimant's disability."
Other possible heads of claim
"29. In addition to the exercise carried out by Mr Bryant another way of analysing this is to compare it to other forms of discrimination which are claims which the claimant perhaps could have but has not. He has not by way of example brought a claim under Sections 20 and 61 (7) that there should have been an adjustment to the terms of the pension scheme so as to enhance his benefits to avoid the disadvantage caused by his working part time. If he had done so on the face of it he would have been able to identify a PCP, that is to say the scheme rule which determines payment of enhanced benefit on the basis of final salary, and on the face of it he would have been able to establish that this placed him at a substantial disadvantage in comparison with a non disabled employee, if he was able to persuade the tribunal to construct as a hypothetical comparator someone who retired on ill health arounds immediately following working full time and being in receipt of full salary but who was in fact not disabled. We have not heard any argument about this and it may or may not be difficult to construct such a comparator. Equally such an argument might be open to precisely the same objection that Mr Bryant advances in relation to the comparator in relation to the section 15 claim.
30. Similarly there is no indirect discrimination claim brought under Section 19. Again on our analysis the PCP would have been readily identifiable. In evidence before us Mr David Williams accepted that disabled employees were more likely to work part time and in addition that disabled employees were more likely to work part time immediately prior to ill health retirement. Accordingly on the face of it on the basis of the evidence before us, the claimant would have established both a PCP and group disadvantage and clearly would have established individual disadvantage on the same basis as the group. This would not appear to be susceptible to the same objection as outlined above given the evidence of Mr Williams as to group disadvantage. On that basis whilst we have to be cautious given that no such claim was brought and we have no means of knowing what evidence would have been given, it appears to us to be permissible speculation to say that it appears likely that the claimant would have satisfied those elements of an indirect discrimination claim and that what would have been left would be the question of justification. If that is right it would seem a curious result if the respondent is correct and the claimant cannot establish in this case that he has been treated unfavourably simply because he has chosen to bring his claim under section 15, which on the face of it is less onerous than either sections 19 or 20."
"We have been cautious in considering the points set out in the paragraphs above in respect of other hypothetical claims, as they are of necessity speculative and the parties have not addressed us as to them. They have not formed a fundamental part of our reasoning but they do appear to us to be permissible speculations." [emphasis added]
Justification
"… the provision or operation of a viable defined benefit occupational pension scheme for employees of the second respondent which provides benefits at an appropriate and affordable level to all eligible members of the scheme whether disabled or otherwise without placing an undue financial burden on the scheme including but not limited to the availability of appropriate immediate enhanced ill health pensions for those unable through illness to continue in their scheme."
However, they were not satisfied that the treatment was a proportionate means of achieving that legitimate aim. Their reasons for so holding included that:-
a) At the time of formulating the Scheme rules in 2008 the trustees had not appreciated the effect of rule 15.5 and "self-evidently did not consider any alternative methods of achieving the same overall result without the discriminatory effect";
b) The Respondents' argument related solely to cost and was therefore indistinguishable from the proposition rejected by the Supreme Court in the context of judicial pensions in O'Brien v Ministry of Justice [2013] IRLR 315;
c) "Whether a [pension] scheme is discriminatory and whether that discrimination can be justified cannot be dependent on the financial condition of the scheme at the time the question comes to be answered."
The tribunal's order
The appeal to the Employment Appeal Tribunal
"27. … The meaning of the word "unfavourably" cannot, in my view, be equated with the concept of 'detriment' used elsewhere in the Equality Act 2010. The word "unfavourably" is deliberately chosen. So, too, the choice not to use the word "detriment" must be assumed to be deliberate: the draftsman would have been well aware of the use of the word "detriment" elsewhere within the Equality Act, and avoided it. Nor, as the parties were agreed, does the word "unfavourably" require a comparison with an identifiable comparator, whether actual or hypothetical, as would the description "less favourable". "Less" invites evidence to be provided in proof of "less than whom?"; "un.." is by contrast to be measured against an objective sense of that which is adverse as compared with that which is beneficial.
28. Section 15 as such was introduced into the Equality Act 2010 for the first time. The word "unfavourably" is used elsewhere in the Act in respect of provisions which have a longer pedigree. Thus in Section 18, a person is held to discriminate against a woman if in a protected period in relation to a pregnancy of hers that person treats her unfavourably because of the pregnancy or because of illness suffered by her as a result of it (Section 18(2): see also Sections 18(3) and (4)). In this use it has the sense of placing a hurdle in front of, or creating a particular difficulty for, or disadvantaging a person because of something which arises in consequence of their disability. Since the word "unfavourable" is the same word in section 15 as it is in section 18, in the same part of the same Act, it is likely that the draftsman had in mind that it would mean much the same in both.
29. I accept Mr O'Dair's submission that it is for a Tribunal to recognise when an individual has been treated unfavourably. It is impossible to be prescriptive of every circumstance in which that might occur. But it is, I think, not only possible but necessary to identify sufficiently those features which will be relevant in the assessment which this recognition necessarily involves. In my judgment, treatment which is advantageous cannot be said to be "unfavourable" merely because it is thought it could have been more advantageous or, put the other way round, because it is insufficiently advantageous. The determination of that which is unfavourable involves an assessment in which a broad view is to be taken and which is to be judged by broad experience of life. Persons may be said to have been treated unfavourably if they are not in a position as good as others generally would be.
…
36. The fact that the Claimant was treated less favourably than those who, also disabled, and subject of the same ill-health retirement scheme, had a higher final salary than he did cannot assist the Claimant, since such reasoning adopts a test of less favourable treatment – in these circumstances, less favourable treatment than that given to others who were disabled, but whose disabilities came on suddenly – rather than applies the relevant word ("unfavourable"). The parties are agreed that that word was deliberately chosen so as not to be the same as "less favourable" and that a "less favourable" treatment test is inappropriate."
"If it was a reasonable judgment in the light of his disability to reduce the claimant's hours of work, then the University was legally obliged to make that reduction: but if the reduction in hours was also held to be the consequence of the claimant's disability so as to render the reduced weekly payment for his labour unfavourable treatment within the meaning of section 15, the Act would in one breath be requiring the University to reduce his hours, but in the next be obliging it to pay the claimant as if there had been no such reduction."
Unfavourable treatment: the Appellant's argument
"for discrimination arising from disability to occur a disabled person must have been treated unfavourably. This means that he or she must have been put at a disadvantage…"
At paragraph 4.9 the Code states:-
""disadvantage" is not defined by the Act. It could include denial of an opportunity or choice, deterrence, rejection or exclusion. The courts have found that "detriment" a similar concept is something that a reasonable person would complain about – so an unjustified sense of grievance would not qualify. A disadvantage does not have to be quantifiable and a worker does not have to experience actual loss (economic or otherwise). It is enough that the worker can reasonable say that they would have preferred to be treated differently".
"Whether treatment is advantageous or not should be irrelevant. The question is whether, objectively, the treatment is unfavourable. An individual may benefit – for example, someone in receipt of salary or, as in this case, a retirement benefit. But that does not, nor should it, prevent a claim for unfavourable treatment if C is experiencing a detriment because of something arising in consequence of disability. That may be less pay or less benefit. The provision is a broad one which is controlled by justification."
"The claimant in this case was not working full time, and thus in receipt of his full salary, when he took ill health retirement. He was working reduced hours because of his disability – something which was undisputed. As a result his benefit was reduced. This was simply unfavourable treatment – a disadvantage because of something arising in consequence of his disability, regardless of the fact that he was benefiting in the first place from having been a member of the pension scheme."
The Respondents' submission
Discussion
The Respondents' cross appeal
Lord Justice Briggs:
Lady Justice Arden: