EAT holds that capping compensation for disabled employees was unfavourable treatment under the Equality Act 2010 - Chief Constable of Gwent Police v Parsons and Robert

On 25 February 2020, the Employment Appeals Tribunal (‘EAT’) upheld the decision of the Employment Tribunal (‘ET’) that capping compensation for two disabled police officers was discrimination arising from their disability under the Equality Act 2010.

Section 15 of the Equality Act relates to discrimination arising from disability and provides:

A person (A) discriminates against a disabled person (B) if

(a) A treats B unfavourably because of something arising in consequence of B’s disability

(b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim.

The Claimants were two police officers aged 44 and 48, who were disabled under the Equality Act. The Claimants were deemed ‘disabled from performing the ordinary duties of a member of the police force’ under regulation H1 of the Police Pensions Regulations 1987 and were provided with ‘H1 Certificates’. The certificates provided the officers with immediate access to their pensions upon leaving the police force, rather than access being deferred until retirement age – age 60 in this case. Under the pension scheme, the Claimants had expected to receive a months’ pay for each year of service - the Claimants had worked for 21 and 18 years respectively.

The Claimants applied to leave the force early, under the police voluntary exit scheme (which is analogous to the traditional redundancy scheme). The scheme provided that leavers be provided with a ‘compensation lump sum’. Due to public-sector austerity measures, those officers due to receive immediate access to their pensions would be awarded a capped sum – capped at 6 months’ pay. The reason for this was to ‘protect the public purse’ and to ensure that officers would not receive a ‘windfall’, compared to leaving for reasons of ill-health, remaining in the force or retiring early. In fact, the officers had been unable to retire early, because whilst unable to perform front-line police duties, both officers were still able to perform ‘back office’ functions.

Upon exit, one Claimant received £21,354, rather than the £74,550 expected under the police pension – a difference of over £50,000. The other Claimant’s reward was not disclosed, but was confirmed to be a difference of £40,000.

The tribunals broke down section 15 into three questions and applied the case as follows:

The H1 certificates, as a matter of fact, arose directly because of the Claimants’ disabilities. The fact that the tests for the issue of the certificates and for disability status under the Equality Act were different, was found to be not relevant.

The relevant treatment was the application of the 6-month cap to the compensation lump sum, which would otherwise have been a substantially larger. This was clearly unfavourable treatment.

Once a prima facie case of discrimination arising from a disability is found – the Claimants have established the above two questions – the onus shifts to the Respondent to establish their defence: that their treatment of the Claimants was a proportionate means of achieving a legitimate aim.

The Respondent’s justification was to properly manage authority funds and prevent the Claimants receiving a ‘windfall’. The EAT held that merely saving money would not be proportionate but that preventing a ‘windfall’ may be, subject to the facts of the case.

To support the Respondent’s justification, it would have been necessary to analyse the Claimant’s relevant routes of exit and the sums payable under them: redundancy, leaving by reason of ill-health and working to retirement. The EAT criticised the lack of information put forward by the Respondent, which had been insufficient to use for comparison and had failed to demonstrate any ‘windfall’. The EAT rejected that the treatment had been a proportionate means of achieving a legitimate aim.

The EAT upheld the ET’s decision in the Claimants’ favour and dismissed the appeal.

Although the facts of this case are specific to those operating within the police force, the decision remains relevant to the traditional employer and employee. The case provides a helpful guide on how the ET and EAT will apply section 15 of the Equality Act. It also highlights the importance of presenting sufficient evidence for employers relying on the defence under section 15.