Employer entitled to calculate ill-health pension by reference to part time salary

An employer did not discriminate against a disabled employee when it calculated his ill-health pension on the basis of the part-time hours he was working because he was disabled.

Speedread

An employer did not discriminate against a disabled employee when it calculated his ill-health pension on the basis of his part-time hours, which had been adjusted from full-time hours in order to accommodate his disability. He had not been treated unfavourably. 

Facts

In The Trustees of Swansea University Pension and Assurance Scheme v Williams, Mr Williams took ill-health early retirement at the age of 38. Under the pension scheme rules he was entitled to an immediate unreduced ill-health pension, based on his final salary at retirement. His employer calculated this based on his part-time hours which it had reduced to comply with the duty to make reasonable adjustments. Mr Williams argued that his employer should have based his pension on his previous full-time salary. He claimed that this was unfavourable treatment arising from disability. 

The employment tribunal upheld the claim, finding that he had been treated unfavourably because of something arising in consequence of his disability (his part time hours). However, the Employment Appeal Tribunal (EAT) overturned the tribunal’s decision and Mr Williams appealed to the Court of Appeal.

Decision

The Court of Appeal ruled that the employment tribunal had been wrong to find that he had been treated unfavourably.  It noted that only people who are disabled would benefit from the ill-health retirement enhanced pension offered by the University. Treatment which confers advantages on a disabled person, but which would have conferred a greater advantage had his disability arisen more suddenly (so that it was not preceded by a period of part-time working) does not amount to unfavourable treatment.  Mr Williams had not therefore been treated unfavourably. 

The Court of Appeal substituted a finding of no discrimination.  We understand that Mr Williams is seeking leave to appeal to the Supreme Court. 

Implications

Benefit schemes which only benefit disabled employees will not fall foul of disability discrimination laws if they treat some disabled employees less favourably than others.