Unfavourable treatment and detriment are not the same in disability discrimination

Mr Williams brought a claim for discrimination arising from disability under section 15 after he took ill health retirement in June 2013 at the age of 38. He suffered from Tourette’s syndrome, obsessive compulsive disorder, depression and other psychological problems. His full time hours had been reduced by half as a result of reasonable adjustments agreed with the university but eventually he was unable to continue working, hence the ill health retirement. Under the university’s pension scheme rules he was entitled to receive an accrued pension and an enhanced pension based on final salary at retirement without actuarial reduction. However because his final salary at retirement was half pay due to his reduction in hours, his pension was reduced accordingly. He alleged that this was unfavourable treatment because of something arising in consequence of his disability.

The Employment Tribunal upheld his claim, accepting that he had been placed at a disadvantage by receiving a lower pension because his disability had resulted in him having to work reduced hours. It concluded that this was unfavourable treatment and that the scheme itself was discriminatory. It also recognised that there was no authority on the meaning of the word “unfavourably”, and made the assumption that this word equated to “detriment”. It accepted that the university had a legitimate aim to protect, which was the provision of pension benefits to all eligible members at an appropriate and affordable level. However it did not accept that this treatment, in reducing Mr Williams’ pension proportionate to his final pay, was a proportionate means of achieving this aim. It took the view that the trustees had not considered the potential discriminatory impact of the scheme for someone in the position of Mr Williams.

The university appealed and the EAT upheld the appeal. Crucially it made the point that the Employment Tribunal had ignored the fact that the ill health retirement scheme applied only to those who were disabled and as such could not be discriminatory because there could be no comparison with non-disabled people in the scheme as there were none. It then went on to look at the use of the word “unfavourably” in the legislation as opposed to “detriment”. It concluded that the two words did not mean the same thing and that unfavourably had been deliberately used in the Equality Act, not only in section 15 but also in section 18 in relation to the protection of pregnant women. Neither could it be equated to “less favourable treatment” because this required a comparator: the whole concept of use of the word “unfavourably” was precisely so that no comparator was required.

Section 18 Equality Act has a context for “unfavourable treatment” which is “placing a hurdle in front of, or creating a particular difficulty for, or disadvantaging a person”. The EAT considered that this definition could equally be applied to section 15 as well as section 18. Consequently the appeal was allowed and the case was remitted to a fresh Tribunal for a rehearing.

It is obvious that “unfavourable” as opposed to “less favourable” is deliberately used to dispense with the need for a comparator, which would be required with the latter term. However commentary suggests that there is less of a distinction between “unfavourable” and “detriment”. The reason for this is that the explanatory notes to section 15 of the Equality Act specifically suggests that the concept of a detriment should be analogous to unfavourable treatment (when the section was drafted). The purpose of it was to re-establish a balance between allowing someone to make out a case of experiencing a detriment arising from their disability and providing the employer with the chance to defend the treatment alleged. However the explanatory note would appear to suggest that the two words are to be treated very similarly and as such this may not be as clear cut as initially it appears.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.