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“Unfavorable treatment’ landmark decision

In the landmark case, Williams vs Trustee of Swansea University Pension & Assurance Scheme, the Supreme Court confirmed the meaning of “unfavourable treatment” in accordance with the Equality Act, 2010 – section 15. The appeal made on behalf of the University and the pension scheme trustees was defended.

The court announced that an employee was not treated unfavourably due to occurrences arising as the consequence of a disability when calculating early retirement pension due to ill health. The ill health pension award could not be deemed as unfavourable just because benefits were perceived as much more advantageous to the applicant in different circumstances. This did not in any way mean that Mr. William was treated unfavourably in accordance with the Act.

Mr. Williams suffered from a variety of conditions, including Tourette’s Syndrome and depression. It was also accepted that he was disabled. After working full time for several years, his hours were reduced by half in July 2011 at his own request. He also applied for ill health retirement at the age of 38. As per the rules of his pension scheme under the company policy, he was entitled to a lump sum and annuity based on his actual salary at the relevant time. This was to be paid immediately and Mr. Williams received the same.

The pension scheme also suggested no reduction for accelerated receipt.

Mr. William proceeded with his claim at an employment tribunal where he was successful in arguing that he was working part time due to his disability and hence the calculation of enhanced element of his salary based on part time hours was deemed unfavourable under the section 20 of Employment Act. Mr. William used the example of someone retiring on immediate basis due to a stroke. In this case, the pension would have been calculated on full time salary basis, assuming the fact that he was working full time until the illness struck.

The trustees appealed at the EAT successfully. Only those employees retiring due to ill health and were disabled within the scope and meaning of the Act could retire early and hence received an immediate enhanced pension which Mr. Williams received. This was hence, favourable and not an unfavourable treatment for someone who has a disability. Hence, Mr. Williams appeals in the Supreme Court was unsuccessful.

Matthew Smith, one of the partners at Blake Morgan who was also a Trustee, the Supreme Court cleared out the answer to two simple questions. What was actually a relevant treatment and was it unfavourable to Mr. Williams? The other question was when deciding whether a treatment is favourable or unfavourable, the court cautioned against an artificial separation between calculation of an award and the award to which a calculation gives rise. In the said case, the treatment was the award of a pension and there was absolutely nothing unfavourable about the same. In fact, the claimant had been able to work on full time basis if he was not disabled but would not have had an entitlement to the pension until the age of 67.

The decision of the court confirmed there was a common sense approach given to the meaning of the word ‘unfavourable’. It is also a reminder for employees whose pension schemes and contracts have benefits for disability to consider those clauses before regarding a treatment as unfavourable and seeking for it to be justified in a court.

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