Andrew Williams v The Trustees of Swansea University Pension & Assurance Scheme and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Bean,Lord Justice Briggs,Lady Justice Arden |
| Judgment Date | 14 July 2017 |
| Neutral Citation | [2017] EWCA Civ 1008 |
| Docket Number | Case No: A2/2015/2625/EATRF |
| Court | Court of Appeal (Civil Division) |
| Date | 14 July 2017 |
[2017] EWCA Civ 1008
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE LANGSTAFF, PRESIDENT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice Briggs
and
Lord Justice Bean
Case No: A2/2015/2625/EATRF
Catherine Casserley (instructed by Didlaw Limited) for the Appellant
Keith Bryant QC and Saul Margo (instructed by Blake Morgan LLP) for the Respondent
Hearing date: 13 June 2017
Approved Judgment
The Appellant Andrew Williams suffers from a disability which caused him first to reduce his working hours to part time working and then to take ill health retirement at the age of 38. The benefits to which he is entitled under his employers' pension scheme are far more advantageous to him than anything which would be available to a non-disabled colleague; but, because an element of them is calculated by reference to final salary, they are less advantageous than those which would be payable to a colleague with a disability of a different kind (such as from a non-fatal heart attack or stroke) which had struck him down so suddenly that there was no period of part time working. The question raised by this appeal is whether he has a valid claim for disability-related discrimination under s 15 of the Equality Act 2010.
The First Respondents are the trustees of the Swansea University Pension Scheme ("the Scheme"). The University, the Second Respondent, is the principal employer of the Scheme. Mr Williams was employed by the University from 12 June 2000 until his retirement on the grounds of ill health with effect from 30 June 2013. His date of birth was 6 October 1974; he was thus 38 at the time of his retirement. He was an active member of the Scheme throughout his employment with the University.
Mr Williams' complaint, which was heard by an employment tribunal sitting at Cardiff (Employment Judge Cadney and two lay members), concerned the way in which an enhancement to his pension benefits was calculated following his ill health retirement with effect from 30 June 2013. Under the Rules of the Scheme, he was allowed to take his accrued pension benefits immediately, and without any actuarial reduction for early receipt, rather than having to wait until his Normal Pension Date ("NPD") of 6 October 2041; and his benefits were significantly enhanced, in that he was treated as though he had accrued further pensionable service for the period (in excess of 28 years) from his actual retirement date to his NPD. He argued that, by using his actual part time salary rather than a full time equivalent, the calculation of the enhancement to his benefits for the period after June 2013 amounted to unlawful discrimination arising from disability under ss 15 and 61 of the Equality Act 2010. There was no complaint concerning the fact that he was only paid a part time salary (when working and when off sick) prior to his retirement, nor concerning the calculation of benefits accrued prior to his ill health retirement, which was also based on his actual part time salary.
The Facts
There was little, if any, factual dispute between the parties before the employment tribunal. The Appellant suffers from Tourette's syndrome, obsessive compulsive disorder and depression. It is common ground that he is disabled within the meaning of the 2010 Act.
In late 2010 Mr Williams requested, and the University agreed, a reduction in his working hours. He had previously worked full time (35 hours per week) and thereafter worked part time; the number of part time hours per week was varied on a number of occasions, on each occasion at his request. By the time of his retirement his agreed working hours were 17 1/2 per week and had been so for nearly two years.
In late 2012 Mr Williams underwent specialist surgical treatment. In February 2013 the University's Occupational Health ("OH") department advised that the treatment was likely, on balance, to enable him to return to work and that it could not be said at that time that he was likely to be permanently incapacitated.
On 15 April 2013 OH advised that there had been sufficient improvement to allow a phased return to work starting on 29 April 2013. A phased return was then agreed. Mr Williams returned to work but on 9 May 2013 OH reported a deterioration in his condition such that he was unlikely to be able to sustain a return to work in the foreseeable future.
He then applied for ill health retirement. By letter dated 13 May 2013 OH advised that he was likely to be permanently incapable of efficiently discharging the duties of his post within Swansea University or in relation to any reasonably comparable post. The same opinion was expressed by the Appellant's GP and by a second OH physician.
The application for ill health retirement was successful and Mr Williams was provided with a benefit quotation and option form.
The University's 2008 pension scheme
The Scheme is a defined benefit occupational pension scheme. It is governed by a Definitive Trust Deed and Rules dated 22 April 2008 which have since been amended a number of times.
The rules of the Scheme provided for accrual of benefits on a final salary basis at an accrual rate of 1/80 th for each year of pensionable service.
The rules also included express provision for an adjustment to the calculation of benefits for members who had worked part time during any period of pensionable service. The adjustment was that accrued benefits would be calculated on the basis of full time equivalent salary with a corresponding reduction in the period of pensionable service; this avoided possible unfairness to employees who had worked full time for a period and then retired when working part time.
The Scheme was then amended with effect from 1 August 2009 so that accrual of benefits in respect of pensionable service on and after that date was on the basis of Career Average Revalued Earnings ("CARE"). Rather than using final salary, the CARE basis calculates benefits separately for each year of pensionable service using the salary in that year; it therefore automatically takes account of fluctuations in salary from year to year. Having been calculated for each year, CARE benefits are then index-linked up to the actual retirement date.
The Rules of the Scheme provide for retirement and receipt of benefits before NPD in a number of circumstances. One of these is early retirement from age 55 in which case a member will be entitled to an immediate pension but subject to actuarial reduction for early receipt. Another is ill health retirement at any age in circumstances where a member is permanently incapable of carrying on his or her occupation. A member who is eligible for, and is granted, ill health retirement becomes entitled to immediate payment of benefits as follows:
Benefits accrued as a result of actual pensionable service up to the date of ill health retirement are paid without any actuarial reduction for early receipt;
Benefits are then enhanced on the basis of salary at actual retirement date but also in respect of a further period of deemed pensionable service from actual retirement date to NPD, again with no actuarial reduction for early receipt.
The key provision of the Scheme Rules for these purposes is Rule 15.5 which provides as follows:
"Subject to sub-rules 15.3 and 15.6 and the GMP Model Rules, a Member who has completed at least two years' Pensionable Service who retires from Service at any time before his Normal Pension Date as a result of Incapacity, may be provided with an immediate annual pension if the Trustees and the Principal Employer so determine. The pension will be equal to the Member's Scale Pension which would have been payable to him had the date of his actual retirement been his Normal Pension Date, calculated on his Final Pensionable Salary at the date of his actual retirement and his Pensionable Service up to his Normal Pension Date."
The calculation of figures for the Appellant's ill health retirement benefits was as follows:
The annual pension will be index-linked for life.
| Accrued benefit | Enhancement | Total | |
| Annual pension: | £5,094.73 | + £4,921.19 | = £10,015.92 |
| Lump sum: | £6,306.28 | + £14,763.57 | = £21,069.85 |
On receipt of the quotation Mr Williams wrote to the University querying the calculation of his benefits. He said, quoting an example given in the Equality and Human Rights Commission ("EHRC") 2011 Code of Practice on Employment, that his benefit quotation had been based on his part time salary, but he believed that his benefits should be calculated on the basis of full time equivalent salary and a corresponding reduction in the period of pensionable service.
The claim as originally presented to the employment tribunal argued that it would have been a reasonable adjustment to calculate Mr Williams' pension benefits on the basis of full time equivalent salary but with a reduction in pensionable service to take account of the period of part time working. However, calculating benefits on the basis of full time equivalent salary with a corresponding reduction in the period of pensionable service would have made no difference to the result, given the way in which CARE benefits are calculated. The reasonable adjustments claim was then withdrawn and a claim of unfavourable treatment under s 15 of the 2010 Act was substituted, arguing that the enhancement to Mr Williams' pension should have been calculated using full time equivalent salary with no corresponding reduction in pensionable service.
Section 15(1) of the Equality Act 2010
Section 15 (1) of the Equality Act...
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