Anna Beale extinguishes ‘unfavourable treatment’ claims in EAT
Written by Ameer Ismail
Anna Beale
Ameer Ismail
Introduction
The recent EAT decision in Cowie & ors v Scottish Fire and Rescue Service [2022] EAT 121 provides useful guidance on the meaning of “unfavourable treatment” under section 15 Equality Act 2010 (“EqA”) and particular “disadvantage” under section 19 EqA.
Background
In response to the coronavirus pandemic and the need for a number of the Respondent’s employees to remain at home (either because they were shielding or for childcare reasons), the Respondent introduced a paid special leave policy (“the special leave policy”). As pre-conditions for entitlement under the special leave policy, employees had to use up any accrued time off in lieu (“TOIL”) and annual leave before applying for paid special leave. The Claimants, employees of the Respondent, complained that the preconditions for entitlement under the special leave policy amounted to: (1) discrimination arising from disability (section 15 EqA); and (2) indirect sex discrimination (section 19 EqA).
Relevant case law
Before exploring the reasoning of the ET and EAT decisions, it is worth reminding ourselves of two relevant authorities.
The first is the Supreme Court decision in Williams v Trustees of Swansea University Pension & Assurance Scheme [2018] UKSC 65. The claimant worked for the respondent employer initially on a full-time basis and later, for reasons related to his disability, on a part-time basis. He subsequently became unable to work at all and took ill-health retirement at the age of 38. Under the employer’s pension scheme, employees in his position were entitled to take accrued pension benefits immediately without any reduction for early receipt. Those benefits were then enhanced based on the salary they were receiving on their actual retirement date. The claimant argued that the respondent’s policy was discriminatory under section 15 EqA because the enhancement in his case was limited to part-time pay, whereas if he had not been ill, he would have continued to work full time.
The Supreme Court dismissed the claimant’s appeal in a short judgment. Lord Carnwath held that section 15 EqA raised two simple questions of fact: (1) what was the relevant treatment; and (2) was it unfavourable to the claimant (Williams at [12]).
In the claimant’s case, the award of the pension of that amount was not in any sense unfavourable because if the claimant had not been disabled and had been able to work full time, the consequence would have been, not an enhanced entitlement, but no immediate right to a pension at all (see [28]). In particular, Lord Carnwath held that the claimant’s formulation “depends on an artificial separation between the method of calculation and the award to which it gave rise” (Williams at [28]).
The second is Chief Constable of Gwent Police v Parsons UKEAT/0143/18. In this case, the claimants were disabled police officers and had ‘H1 certificates’ which allowed them to have immediate access to deferred pension on leaving the police. They left under the ‘voluntary exist scheme’ which enabled police pension authorities to pay a ‘compensation lump sum’ to officers who left the force voluntarily. The compensation lump sum was ordinarily capped at a maximum of 21 months’ pay. However, the respondent considered that different circumstances applied to the claimants because they had immediate access to deferred pension on leaving the police and so capped their compensation lump sum to 6 months.
The EAT in Parsons noted that that the Chief Constable was not obliged to apply the cap of six months under the statutory scheme (Parsons at [18]). In those circumstances, the EAT considered that the facts of Parsons were distinguishable from Williams because the relevant treatment was identified as the application of a cap to a payment that would otherwise have been substantially larger (Parsons at [20]).
ET Reasoning
Discrimination arising from disability: section 15 EqA
The ET held that the Respondent’s preconditions for entitlement to paid special leave was in violation of section 15 EqA.
The ET concluded that depriving the Claimants of the TOIL they had earned, and removing the choice and flexibility they had, was unfavourable treatment as it was not something the Claimants wanted to do. Other staff who had worked the same hours but had chosen money instead of TOIL were given paid special leave immediately. Thus, the Claimants argued that requiring them to use accrued TOIL was unfavourable and put them at a disadvantage.
Likewise, the ET concluded that being compelled to use annual leave at a time when the Claimants did not wish to use it was also unfavourable. Loss of flexibility and choice again was central to the ET’s reasoning. Although the ET had considered the cases of Williams and Parsons, it held that the present case was “more like Parsons” (ET [322]).
In relation to the remaining ingredients of the section 15 claim, the ET held that the reason why the claimants were required to make use of the special leave policy was because their disability prevented them from attending work. Hence it was something arising in consequence of the employee’s disability. Finally, the ET held that the Respondent’s measures were not objectively justified.
However, in terms of remedy, the ET concluded that the evidence did not provide a basis for an award of injury to feelings.
Indirect sex discrimination
The ET found that the PCP, requiring employees to take annual leave and TOIL before being granted paid special leave, was in principle a disadvantage because it required the removal of accrued TOIL and it compelled employees to use their annual leave at a time when they did not wish to do so. Loss of flexibility was once again key in the ET’s reasoning.
The ET however held that there was no group disadvantage on the basis that there was no evidence from which it was possible to infer that female employees had been more likely to accrue TOIL than male employees or that female employees were more likely to rely on the special leave policy.
The appeals in the EAT
Following the appeals of both the Claimants and the Respondent, the EAT had three issues to determine:
First, was the ET correct in finding that the preconditions under the special leave policy amounted to unfavourable treatment, or gave rise to a disadvantage, for the purposes of section 15 and/or section 19 EqA?
Second, if there was in principle a disadvantage for the purposes of section 19 EqA, did the ET err in concluding that there was no group disadvantage for women? The Claimants’ appeal centred on the guidance provided in relation to the application of “child care disparity” in Dobson v North Cumbria Integrated Care NHS Foundation Trust [2021] ICR 1699.
Third, having found that the section 15 claims were made out, did the ET err in making no award for injury to feelings?
“Unfavourable treatment” and/or “disadvantage”
The EAT applied the two-stage approach of Lord Carnwath in Williams. For Eady J, the crucial question in Cowie was: (1) what was the relevant treatment (EAT [75]).
The ET had considered the pre-conditions of the special leave policy, namely having to use accrued TOIL and annual leave at a time not of the employees’ choosing, as the relevant “treatment” (EAT [76]).
The EAT held that this was an error in law (EAT [79]):
“The treatment meted out by the respondent because of that inability to attend work (the “something”) took the form (relevantly) of the paid special leave policy. As was not in dispute, that policy was favourable to the claimants, providing them with an entitlement to paid leave on an indefinite basis. Although the policy was subject to conditions for entitlement (the prior use of accrued TOIL/annual leave) that could not detract from the favourable nature of that treatment.”
The EAT distinguished the present case from Parsons. At paragraph 77, the EAT found that in Parsons the unfavourable treatment was not a “necessary precondition or consequence” of the relevant scheme for which the claimants had applied. It was not “intrinsically entwined with the advantage the claimants would otherwise receive in respect of their pensions”. In contrast, in the present case:
“78. Although we can acknowledge that the loss of flexibility and choice in terms of when to take accrued TOIL and annual leave could constitute unfavourable treatment in general terms, the difficulty that arises in the present case is that there was no general requirement on the claimants to use TOIL and/or leave at a time of the respondent’s choosing; rather, the specific requirement to exhaust any accrued TOIL and/or leave arose only when, and to the extent that, the claimants sought to access paid special leave. It would be artificial to consider the requirement to use accrued TOIL and/or annual leave separately from the entitlement to paid special leave because the two were thus inextricably linked.”
The latter sentence could well be described as the ratio decidendi of the decision: that for the purposes of section 15 EqA, it is artificial to consider separately the necessary pre-conditions for an entitlement to a benefit from the benefit itself. Even though the preconditions of the scheme could be described as “unfavourable”, the relevant treatment is the benefit of the policy. The case of Parsons is distinguishable because the ‘cap’ that applied to the claimants were not a necessary precondition or consequence of the policy in question and so could be considered separately to the compensation lump sum provided.
In fact, the EAT considered that the facts of Cowie fell within the analysis in Williams:
“80. Viewing the facts of this case with the guidance in Williams in mind, similar points can be made to those identified as relevant in that case. The section 15 claimants were granted an entitlement to paid special leave during the periods of time they were unable to work due to their disabilities; that was an advantage they would otherwise not have enjoyed during those periods of absence.”
Hence, it was held that the case fell within the analysis in Williams because “the claimants were complaining of the conditions of entitlement to the favourable treatment extended to them under the paid special leave policy” (EAT [81]). The error of law by the ET was to allow the Claimants complaint to define its assessment of treatment and thus to artificially separate out the conditions of entitlement from the benefit itself.
The EAT further reminded us that a policy does not become “unfavourable” by reason of the fact that it could, hypothetically, have been even more favourable (EAT [80]; cf. Williams at [22]).
Finally, the EAT applied the same reasoning in its analysis of “disadvantage” under section 19 EqA. It found that the ET erred in finding that the preconditions of the policy amounted to a “disadvantage”. For the same reasons, the consideration of the preconditions as a disadvantage in isolation would be a wholly artificial separation between the conditions of entitlement to the benefit from the benefit itself (EAT [82]). As the special leave policy was, on the ET’s own findings “clearly favourable”, there was no particular disadvantage.
In accordance with the guidance of Lord Carnwath in Williams against adopting narrow distinctions between “unfavourable” and analogous concepts such as “disadvantage” (Williams at [27]), the EAT considered that if the Respondent is correct that there was no unfavourable treatment, then the contention that the claimant suffered particular disadvantage would necessarily fail (EAT [74]).
Group disadvantage
In relation to the second issue in the appeal, which was approached as obiter in light of the findings on particular disadvantage, the EAT agreed with the ET that there was no group disadvantage to women. It could not be said that the ET failed to have regard to the issue of the childcare disparity identified in Dobson. In fact, the ET’s reasoning demonstrates careful consideration of the guidance in Dobson (EAT [84]). The EAT concluded that:
First, in the absence of evidence and data, the ET had permissibly considered that it was possible that the impact of the preconditions of the special leave policy in fact affected men just as much as women (EAT [87])
Second, it was found that the ET had considered the general childcare disparity in its reasoning. The ET’s position was that, allowing for general childcare disparity, it could not simply assume, absent any evidential basis, that women more than men would have to use the special leave policy for child care arrangements. This was not an error in approach or law (EAT [88]).
Third, whilst the EAT recognised the caution expressed in Dobson in relation to whether individual disadvantage can support inferences of group disadvantage, the very limited evidence adduced in respect of the individual cases did not permit the ET to further extrapolate as to the impact of the pandemic on men and women in the workplace. (EAT [89]).
Hence, the EAT held that there was no group disadvantage pursuant to section 19 EqA.
Injury to feelings
In short, it was held that the ET was entitled to reach the conclusion that there was insufficient evidence to justify an award for injury to feelings (EAT [91]). A finding of discrimination does not automatically lead to an award for injury to feelings: the injury has to be established on the evidence.
Implications of the EAT’s decision
The most important aspect of the EAT’s decision in Cowie is the guidance it provides on the meaning of “unfavourable treatment” and “disadvantage” under section 15 and section 19 EqA respectively.
The EAT’s findings in relation to the second and third issues in the appeal are unlikely to have a wider impact beyond reminding us that the ET is entitled to require sufficient evidence: (1) to justify an award for injury to feelings; and (2) to show there was group disadvantage in a claim for indirect sex discrimination, provided that the ET has taken judicial notice of the general disparity in childcare responsibilities across men and women. As held expressly in Dobson at paragraph 50, “taking judicial notice of the childcare disparity does not necessarily mean that the group disadvantage is made out”.
The EAT’s approach to section 15 EqA: unfavourable treatment
The EAT’s decision in Cowie provides useful guidance on the correct approach to section 15 EqA. In answering the first question posed by Lord Carnwath’s two-stage test (“what was the relevant treatment”), the tribunal should not consider separately the necessary pre-conditions for an entitlement to a benefit from the benefit itself.
A key factor in that analysis is therefore whether the treatment complained of is a “necessary precondition” or “intrinsically entwined with the advantage”. If it is a necessary precondition, then the case falls within the analysis of Williams and the preconditions should not be considered separately from the benefit. If not, then the case falls within the analysis of Parsons and so separating the treatment complained of from the benefit of the policy would in principle be permissible.
Moreover, in determining whether the treatment was “unfavourable”, the tribunal must ask whether the relevant policy provided an “advantage they would otherwise not have enjoyed” had they not been disabled (EAT [80]). The ET’s focus on the fact that employees had to exhaust their accrued TOIL and/or annual leave to obtain paid special leave crucially overlooked that central piece of analysis in Williams.
Applying the same analysis to section 19 EqA
The EAT in Cowie notably went further than Williams and held that the same analysis of section 15 EqA (that it is artificial to consider separately the preconditions of an entitlement to a benefit from the benefit itself) applies to the meaning of “disadvantage” within section 19 EqA. As matter of logic and in light of the guidance of Lord Carnwath in Williams, it makes sense to avoid any material distinction in meaning between “unfavourable” and “disadvantage” for the purposes of the Equality Act 2010.