Facts
Mr Pelter was a founding shareholder and director at Buro Four Project Services Limited. On 7 March 2003, Mr Pelter entered into a new Director’s Service Agreement which stated that “the Director shall retire at the Company’s normal retirement age for Directors… whereupon the Agreement shall terminate with immediate effect”.
Buro Four Project Services Ltd agreed to provide Mr Pelter with access to permanent health insurance (PHI) rather than pay sick pay in the event that he became incapacitated from work. The insurance provided that payment of benefits would end at 65 which was lawful pursuant to paragraph 14 of schedule 9 of the Equality Act 2010. On 11 March 2011, Buro Four Project Services Ltd renewed its PHI policy with UNUM which provided that “Once a member is incapacitated the terms and conditions of the policy immediately prior to his incapacity will continue to determine his benefit…”
Mr Pelter became incapacitated to work on 3 July 2011 and on 3 January 2012 the state pension age increased from 65 to 66. Mr Pelter’s claim for PHI benefits was not actually accepted by UNUM until 5 March 2013, however the benefits were backdated so Buro Four Project Services Ltd recovered the sums they had paid to Mr Pelter.
Mr Pelter claimed it was direct age discrimination for Buro Four Project Services Ltd to provide PHI where payments cease on his 65th birthday and he claimed that Buro Four Project Services Ltd’s failure to update the PHI policy applicable to Mr Pelter to comply with paragraph 14(1) of schedule 9 of the Equality Act 2010 amounted to direct age discrimination. Mr Pelter also claimed it was direct age discrimination for Buro Four Project Services Ltd to not transfer him to a PHI policy which would pay beyond his 65th birthday as well as their decision to cease PHI payments to him on his 65th birthday.
Decision
Direct discrimination
The ET did not accept Mr Pelter’s contention that there is a continuing obligation to renew the terms of the benefits received by Mr Pelter.
They went on to find that the payments under the PHI scheme stopped in March 2020 due to the fact Mr Pelter has reached the age of 65. This was within the rules of the UNUM scheme which Mr Pelter was claiming under, since he made his PHI claim in July 2011. This was the act of UNUM who, in accordance with the provisions of the agreement with the Respondent dated 2011, did not pay out to Mr Pelter after his 65th birthday. The ET applied the decision of the EAT in Hall v Xerox to find that the discriminatory act was that of UNUM, not the Respondent.
Indirect discrimination
The ET found that the relevant PCP falls within the exception provided by para 14(1) Schedule 9 as it is an insurance benefit within the terms of that definition at the date of the entry point into the scheme, when the Mr Pelter’s retirement age was not above 65.
The judgement is available here.
Mr D Pelter v Buro Four Project Services Ltd, Employment Tribunal, 16 February 2021, Case No: 2203004/2019
EDIT: This case was subsequently appealed to the EAT. Read our summary.