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

Mr Williams, who suffered from Tourette's syndrome, retired on ill-health grounds and received an enhanced pension calculated on his part-time salary. He claimed this was unfavourable treatment under section 15 of the Equality Act 2010. The Supreme Court dismissed his appeal.

Facts

Mr Williams was employed by Swansea University from June 2000 until his ill-health retirement on 30 June 2013, aged 38. He suffered from Tourette’s syndrome and other conditions amounting to a ‘disability’ under section 6 of the Equality Act 2010. Throughout his employment he was a member of the University’s pension scheme, accruing over 13 years’ pensionable service.

For the first ten years he worked full-time (35 hours per week). Subsequently, owing to his disabilities, his hours were reduced as a reasonable adjustment, eventually to 17.5 hours per week. Following specialist brain surgery in late 2012, he successfully applied for ill-health early retirement (IHR) in May 2013.

Under the IHR provisions he received an immediate lump sum and annuity based on accrued benefits without actuarial reduction, plus an enhanced element calculated as if he had continued in service to his normal pension date (age 67). The enhanced element was calculated on his actual (part-time) salary at retirement. Mr Williams contended that calculating the enhanced element by reference to his part-time rather than full-time salary amounted to unfavourable treatment because of something arising from his disability.

Issues

The central issue was the meaning of ‘treats… unfavourably’ in section 15(1)(a) of the Equality Act 2010, and whether the calculation of Mr Williams’ enhanced pension by reference to his part-time salary constituted unfavourable treatment because of something arising in consequence of his disability.

Arguments

Appellant

Ms Crasnow QC submitted that it was unfavourable to calculate the enhanced element using the lower part-time salary, given that Mr Williams worked part-time only because of his disabilities. The ‘unfavourable treatment’ was the adoption of his part-time salary as the multiplier; the ‘detriment’ was that he could not achieve full payment under the scheme. She relied on the Equality and Human Rights Commission’s Code of Practice (2011), submitting that ‘unfavourable’, ‘disadvantage’ and ‘detriment’ are similar concepts, and on the UN Convention on the Rights of Persons with Disabilities to argue for a broad interpretation including a subjective dimension tempered by reasonableness.

Respondents

Mr Bryant QC supported the reasoning of the EAT and Court of Appeal, adopting Langstaff J’s interpretation that ‘unfavourably’ involves placing a hurdle, creating a difficulty, or disadvantaging a person, judged objectively by broad experience of life. Crucially, he submitted that Mr Williams had not been treated unfavourably: had he not been disabled and had worked full time, he would not have received a pension on a more favourable basis but would have had no immediate entitlement to any pension at all.

Judgment

The Supreme Court (Lord Carnwath delivering the judgment, with whom Lord Kerr, Lord Hodge, Lady Black and Lord Kitchin agreed) dismissed the appeal.

Lord Carnwath reviewed the legislative history. Section 15 was enacted to address the difficulties caused by the House of Lords’ decision in Lewisham London Borough Council v Malcolm [2008] UKHL 43, removing the requirement for a comparator. The section instead raises two questions of fact: what was the relevant treatment, and was it unfavourable to the claimant?

Lord Carnwath agreed with the Court of Appeal that little is gained by drawing narrow distinctions between ‘unfavourably’ in section 15 and analogous concepts such as ‘disadvantage’ or ‘detriment’ elsewhere in the Act. The Code of Practice provided helpful guidance on the relatively low threshold of disadvantage required to trigger the section, but could not replace the statutory wording.

The central difficulty with Mr Williams’ case was the identification of the relevant ‘treatment’. The treatment in question was the award of a pension, and there was nothing intrinsically unfavourable or disadvantageous about it. Unlike in Malcolm, where eviction was plainly disadvantageous, here the claimant’s argument depended on an artificial separation between the method of calculation and the award itself. The only basis on which Mr Williams was entitled to any award at that time was by reason of his disabilities; had he been able to work full-time, he would have had no immediate right to a pension at all. The award was therefore not in any sense unfavourable, nor could it reasonably have been regarded as such.

Implications

The decision clarifies the meaning of ‘unfavourable treatment’ under section 15 of the Equality Act 2010. The threshold is relatively low and corresponds broadly with concepts of ‘disadvantage’ or ‘detriment’; no comparator (actual or hypothetical) is required. However, treatment which is advantageous to a disabled person, and which is only available to them because of their disability, will not be characterised as unfavourable merely because it could have been more advantageous, or because someone with a different medical history might have received more.

The decision is significant for employers, pension scheme trustees, and insurers who provide enhanced or special benefits triggered by disability. It confirms that conferring such benefits on a particular calculation basis does not become unlawful discrimination under section 15 simply because a different disability or medical history might have produced a higher figure. The reasoning preserves the validity of pension and insurance schemes that confer increased benefits in defined circumstances.

The judgment leaves open how ‘unfavourable treatment’ should be analysed in different factual contexts and acknowledges that what amounts to unfavourable treatment is fact-sensitive. The Court declined to speculate on hypothetical applications of section 15 or the Code, and made clear that such determinations must be made case by case, judged broadly and objectively, with regard also to whether the treatment could reasonably be regarded as unfavourable.

Verdict: Appeal dismissed. The Supreme Court held that the calculation of Mr Williams’ enhanced pension element by reference to his part-time salary did not constitute ‘unfavourable treatment’ within section 15(1)(a) of the Equality Act 2010, since the award of the pension was in itself advantageous and only available because of his disability.

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