J McAllister v Commissioners for HMRC

For the purposes of section 15 of the Equality Act 2010, an Employment Tribunal must make its own critical and evidence-based assessment of objective justification. It must determine whether the employer’s aim meets a real need and whether the discriminatory measure was appropriate and reasonably necessary, balancing the employer’s needs against its effect on the disabled employee.

A benefit paid only because of disability-related incapacity is not unfavourable treatment merely because its calculation produces a lower amount than might have been paid in different circumstances. The relevant treatment is the award as a whole; the method of calculation cannot artificially be separated from it.

The claimant, who was disabled by anxiety and depression, was dismissed for capability after prolonged absence. The Manchester Employment Tribunal dismissed his unfair-dismissal and section 15 disability-discrimination claims concerning dismissal. It held that dismissal was justified.

The Tribunal also upheld a section 15 claim concerning a 50% payment under the Civil Service Compensation Scheme, finding that an 80% payment would have been proportionate. The claimant appealed. The respondent cross-appealed, contending that the payment was not unfavourable treatment at all. The central issues were objective justification for dismissal and the proper identification of unfavourable treatment under section 15.

1. Appeal dismissed; cross-appeal allowed. The Employment Tribunal permissibly found that maintaining satisfactory attendance, a fair and effective sickness-management regime, and efficient use of resources met a real need. The customer-service aim did not alone justify dismissal, but the Tribunal found other adverse effects, including management time and team morale.

2. Under section 15 of the Equality Act 2010, objective justification requires the Tribunal to conduct its own critical evaluation. It must balance the discriminatory impact against the undertaking’s reasonable needs, and decide whether the measure was appropriate and reasonably necessary. More than one proportionate option may exist. Reading the Tribunal’s reasons as a whole, it had considered the impact of absence, less discriminatory alternatives and the substantial effect of dismissal on the claimant. Its conclusion that dismissal was proportionate was open to it.

3. The distinct test under section 98(4) of the Employment Rights Act 1996 asks whether dismissal fell within the band of reasonable responses. The Tribunal’s conclusion that this capability dismissal was fair disclosed no error of law.

4. The Tribunal was entitled at the liability stage to consider whether an 80% compensation payment would have been a less discriminatory means of achieving the stated aim. That did not determine the remedy. It erred, however, in purporting formally to determine the independent Civil Service Appeal Board’s decision, which was not before it.

5. On the cross-appeal, the relevant treatment was the award under the Civil Service Compensation Scheme, not the calculation of its amount in isolation. The claimant was entitled to that award because of disability-related incapacity. The award was therefore not unfavourable treatment. The Tribunal wrongly separated the calculation from the entitlement, contrary to the approach in Williams.

• Employment Appeal Tribunal: claimant’s appeal dismissed and respondent’s cross-appeal allowed: [2022] EAT 87.
• Manchester Employment Tribunal: dismissed the unfair-dismissal and dismissal-related section 15 claims; upheld the section 15 claim concerning the 50% Civil Service Compensation Scheme payment.