Land Registry v Houghton & Ors

For section 15 of the Equality Act 2010, unfavourable treatment may arise in consequence of disability through an intervening event. Where disability-related absence produces a formal warning and the warning automatically excludes the employee from a bonus, non-payment is treatment because of something arising from disability. The decision-maker's motive, or an administrator's lack of knowledge of the disability, does not displace that causal connection.

Justification requires an objective balance between the discriminatory effect and the employer's legitimate needs. A tribunal may find automatic bonus exclusion disproportionate where there is no discretion to disregard a sickness warning, unlike a conduct warning, and no ability to take account of improved attendance after the warning.

Five disabled employees brought claims under section 15 of the Equality Act 2010. Their disability-related absences resulted in formal sickness warnings. Under the Land Registry's discretionary bonus scheme, a sickness warning automatically made an employee ineligible for a bonus. The Employment Tribunal upheld the claims, rejected justification, and awarded the pro-rated bonus to all but one claimant, whose loss had been compensated in separate personal-injury proceedings.

The Land Registry appealed against the findings on causation, justification and compensation. The central issues were whether the connection between disability and non-payment was too remote, whether the automatic exclusion was proportionate, and whether the bonus awards were open to the Tribunal.

1. Appeal dismissed. The Employment Tribunal was entitled to hold that each claimant satisfied section 15(1)(a) of the Equality Act 2010.

2. The relevant unfavourable treatment was the actual non-payment of the bonus, rather than the earlier issue of a sickness warning. Each claimant's disability-related absences led to a warning, and that warning automatically disentitled the claimant to the bonus. That sequence was a sufficient consequence of disability for section 15. A claim about the warning itself, and whether it would have been in time, did not answer the claim concerning later non-payment.

3. The proper causation inquiry asks what caused the treatment, rather than the discriminator's motive. The administrative employee's lack of knowledge of disability was immaterial because the disability-related absences themselves caused the disqualifying warning. The Tribunal applied the distinction explained in JFS, [2010] 2 AC 728, and illustrated by James v Eastleigh BC, [1990] AC 751.

4. The employer's aims of rewarding contribution, performance and attendance were legitimate. However, the Tribunal was entitled to find the means disproportionate. Once a sickness warning had been issued, managers had no discretion to preserve bonus eligibility, although they had such discretion for conduct warnings. The scheme also prevented any account being taken of improvement after a warning. No explanation justified that difference.

5. The proportionality balance was for the Employment Tribunal unless it had taken irrelevant matters into account or ignored relevant matters. No error of law was shown. The award of the pro-rated bonus was also open to the Tribunal because, absent the disability-related warning, each relevant claimant would have received it.

• Employment Appeal Tribunal: dismissed the Land Registry's appeal and upheld the Bristol Employment Tribunal's finding of disability-related discrimination and its compensation awards.
• Employment Tribunal: upheld the claimants' section 15 claims in a reserved judgment promulgated on 27 November 2013, later varied by consent on reconsideration on 24 January 2014.