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

Keith Bryant QC and Saul Margo successfully represented the Trustees of Swansea University Pension and Assurance Scheme and another before the Supreme Court.

Facts

The case was about the interpretation of ‘treats…unfavourably’ under s.15(1) of the Equality Act 2010 (‘EA 2010’) which reads as follows:

‘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’ (emphasis added).

Mr Williams was ‘disabled’ within the meaning of s.6 EA 2010.

He was employed by Swansea University from 12 June 2000 until he retired for ill-health reasons on 30 June 2013, aged 38. For the first 10 years of his employment, Mr Williams worked full-time (35 hours per week). Thereafter, due to his disabilities and at Mr Williams’ request, the university made a ‘reasonable adjustment’ allowing him to work reduced hours. At the time of his retirement, Mr Williams’ agreed working hours were half of his full-time hours (17.5 hours per week).

During his employment at the university Mr Williams was an active member of the university’s pension scheme (‘the Scheme’). The Scheme provided for accrual of benefits on a final salary basis up to 1 August 2009. The Scheme was amended so that accrual of benefits on or after that date was on the basis of Career Average Revalued Earnings.

Under the ill-health retirement provisions of the Scheme, Mr Williams was entitled to receive:

(i) A lump sum and an annuity based on his accrued benefits without any actuarial reduction for early receipt. The annuity and lump sum were calculated on the basis of his actual salary at the relevant times, whether full time or part-time;
(ii) An enhancement to both his lump sum and annuity (‘the Enhancement’) without any actuarial reduction for early receipt. The Enhancement was calculated on the basis of his actual salary at the date of retirement and a period of deemed pensionable service, as though he had continued in active service until his Normal Pension Date under the Scheme (age 67).

The dispute before the Supreme Court related to (ii).

Mr Williams claimed that the calculation of the Enhancement based on his part-time rather than his full-time salary constituted unfavourable treatment because of something arising in consequence of disabilities, that is, his inability to work full time. It was therefore discrimination within the meaning of s.15(1)(a) unless shown under s.15(1)(b) to be a proportionate means of achieving a legitimate aim.

The Employment Tribunal upheld Mr Williams’ claim. This was overturned by the Employment Appeal Tribunal and the Court of Appeal. Mr Williams appealed the decision of the Court of Appeal the Supreme Court.

Judgment

The Supreme Court unanimously dismissed Mr Williams’ appeal. Lord Carnwath gave the judgment of the Court.

It was not disputed that s.15 EA 2010 needed to be considered in the context of the previous law as interpreted by the House of Lords in Lewisham London Borough Council v Malcolm [2008] UKHL 43 and that s.15 was intended to reverse that ruling. However, the Court held that its task of interpretation was not to re-construct the pre-Malcolm law but to construe the section itself in accordance with ordinary principles (§12).

The Court found that s.15(1)(a) appeared to raise two simple questions of fact: (i) what was the relevant treatment and (ii) was it unfavourable to the Claimant? (§12).

In this case the relevant treatment to which s.15 applied was the award of a pension. Lord Carnwath held that ‘there was nothing intrinsically unfavourable or disadvantageous about that’ (§28).

In fact, the Court found ‘as Mr Bryant says, had he been able to work full time, the consequence would have been, not an [Enhancement], but no immediate right to a pension at all’ (§28).

In those circumstances, the Court held that the award of Mr Williams’ pension was ‘not in any sense “unfavourable”, nor (applying the approach of the Code), could it reasonably have been so regarded’ (§28).

In reaching this decision the Court made the following additional observations:

• In most cases, little is likely to be gained by seeking to draw narrow distinctions between the word ‘unfavourably’ in s.15 and analogous concepts such as ‘disadvantage’ or ‘detriment’ found in other provisions, nor between a subjective or objective approaches (§27); and
• While provisions in the Equality and Human Rights Commission’s Code of Practice (2011) could replace the statutory words, they did provide ‘helpful advice’ as to the relatively low threshold of disadvantage sufficient to trigger the requirement to justify under s.15 EA 2010. Reference to ‘more remote’ sources such as the UN Conventions was unnecessary. In spite of its helpfulness the Court held that the text of the Code did not overcome the central objections to Mr Williams’ case (§27).

Commentary

The Supreme Court’s judgment gives some helpful clarity as to the meaning of ‘unfavourable treatment’ for the purposes of a s.15 EA 2010 claim. It confirms that the hurdle for claimants is a relatively low one. It appears to confirm that, although in most cases little will turn on it, the meaning of unfavourable treatment will not necessarily be the same as the meaning of detriment in every case. It also seems that little will turn on whether one takes a subjective, objective or mixed approach to ‘unfavourable treatment’.

The Supreme Court emphasised that it is necessary as a first step to identify with care the treatment that is alleged to have been unfavourable. On the facts of this case, once the treatment had been correctly identified as the payment of an immediate pension which was only available to disabled employees (since only disabled employees, indeed only a subset of disabled employees, could be eligible for ill-health retirement under the rules of the scheme) it was clear that such treatment was not in any sense unfavourable.

The facts of this case are unlikely to be repeated in many, if any, other s.15 claims. This judgment may therefore provide considerable relief to those in the pensions industry who may have been concerned about potentially significant implications for schemes if Mr Williams had succeeded.  However, it is probably of limited use to those involved in other s.15 claims.

In terms the test for unfavourable treatment, the Supreme Court did not give any particular formulation itself. However, having quoted from the formulations given by the EAT and CA, Lord Carnwath said that he was ‘substantially in agreement with the reasoning of the Court of Appeal’.  That is likely to lead to reliance being placed on the Court of Appeal’s formulation in future cases.

The judgment of the Court may be read in full here.

News 17 Dec, 2018