Partner Sue Dowling, in our Employment Law team, discusses ill health retirement pension entitlements.
In the recent case of Williams v Trustees of Swansea University Pension & Assurance Scheme, the courts have been required to consider the claim of a disabled employee who argued that his previous full time salary should apply to his ill health retirement pension entitlements, rather than the part time salary that he was on at the time his employment terminated.
Mr Williams requested part time hours in 2010 as a result of his disabilities which included depression, Tourette’s syndrome and OCD. He moved from working a 35 hour week to a 17.5 hour one. His employment terminated in May 2013 when medical advice confirmed that he would be unlikely to be able to discharge his duties going forward. As a result, he was ill health retired at the age of 38 and immediately received the benefits under his pension, without actuarial deduction, on the basis that he had worked until age 67. His claim centred on the fact that his entitlements were based on his part time salary rather than a full time one. He claimed discrimination ‘arising from a disability’ on the basis that his disabilities were the reason for him having switched to part time hours. While he was effectively better off than a non-disabled employee, he was worse off than a disabled employee in the same position who had not had to suffer a reduction in their hours (e.g. because of a swiftly arising disability such as a stroke).
The case recently reached the Court of Appeal who decided that Mr Williams had not been treated ‘unfavourably’ because of something arising in consequence of his disability. It was held that treatment which advantages a disabled person, but would have been more advantageous had their disability arisen more suddenly, does not amount to unfavourable treatment within the meaning of the Equality Act 2010 – the intention of Parliament was considered and the Court found that it could not have been intended for employers to shoulder the burden of such a switch in hours, even if the switch was due to disability. The employee was still being treated favourably through the ill health retirement entitlement.
What can we draw from this decision? The word ‘unfavourably’ within disability discrimination law does not equate simply to ‘detriment’ and requires more significant consideration. Employers can be encouraged that there is not a duty as such to go beyond favourable treatment, even if there is a greater advantage the employee could benefit from. That said, claims involving arguments of disability discrimination are typically complicated and can be very costly, so we would recommend taking advice on a case by case basis at an early stage of dealing with an employee with long term health issues.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
