In indirect discrimination claims, tribunals have to decide what was the “relevant treatment” meted out to the claimant and whether it was unfavourable. In Chief Constable of Gwent Police v Parsons and Roberts, the Employment Appeal Tribunal (EAT) held that it was unfavourable treatment to cap the compensation lump sum to which the two disabled police officers were entitled.
Mr Parsons and Mr Roberts, both longstanding police officers in their 40s, had been certified as “disabled from performing the ordinary duties of a member of the police force” under regulation H1 of the Police Pensions Regulations 1987. Although this allowed them immediate access to a “deferred pension” on leaving the police, they had not been allowed to retire on ill health grounds as they were still able to perform valuable “back office” functions.
Police officers are not employees and therefore cannot be made redundant. However, the two men were able to take advantage of a “voluntary exit scheme” (VES) adopted by Gwent Police in 2016, which enabled police pension authorities to pay a “compensation lump sum” to officers who left the force voluntarily. This was calculated on the basis of one month’s pay multiplied by the officer’s years of service, up to a maximum of 21 months’ pay.
As such the men should have received 21 and 18 months of compensation respectively. Instead their lump sum was capped at six months because they were entitled under the H1 certificate to receive their “deferred pension” immediately on retiring from the force, thus allowing the Chief Constable to “protect the public purse”.
The men claimed indirect discrimination under section 15 of the Equality Act 2010 on the basis that capping the lump sum arose “because of something arising in consequence of” their disability. The Chief Constable defended the claim on the basis that it was a proportionate means of achieving a legitimate aim which was to “properly manage the authority funds”.
The tribunal agreed with the two officers that, as their entitlement to an H1 certificate was “something arising in consequence of” their disability and the Chief Constable had treated them unfavourably because of that entitlement, capping their VES lump sum constituted unfavourable treatment. It held that the ‘proportionate means of achieving a legitimate aim’ defence failed due to a lack of evidence to support it.
Following the Supreme Court decision in Williams v Trustees of Swansea University Pension and Assurance Scheme and anor (see weekly LELR 607), the EAT held that tribunals had to answer two simple questions: what was the relevant treatment and was it unfavourable to the claimant?
Distinguishing Williams (in which the “relevant treatment” was classified as the award of a pension which could not be unfavourable treatment), the EAT held that capping the compensation was clearly unfavourable treatment. There was also no need for the tribunal to include the deferred pension which the men received when they left the force when considering the relevant treatment.
Secondly, it held that possession of H1 certificates (which provided the men with their entitlement to immediate receipt of deferred pension and therefore the reason for capping their lump sums) was clearly “something arising in consequence of” their disability since the certificates were based on exactly the same impairments as those admitted by the Chief Constable under the Equality Act.
Although preventing a “windfall” could constitute a legitimate aim, the Chief Constable had not provided enough evidence to show that the unfavourable treatment could be said to be justified under section 15 of the Equality Act. In particular, the financial evidence did not show that the police officers would receive more from the full compensation lump sum than they would receive in earnings had they stayed in the police force until retirement age.
This is a good case to read for anyone wanting to see how to approach a section 15 claim properly. The EAT did not get too far into the issue of justification as the employer did not bring enough evidence to warrant it doing so. However, even if the employer had established that either claimant might get a windfall they would still have had difficulties defending a blanket six month cap as that is an arbitrary approach which could result in great hardship.