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Pension scheme did not discriminate against worker who had a mixture of full-time and part-time service

17 November 2017 #Employment

In Dr Parker v MDU Services Ltd, the claimant alleged that her employer’s pension scheme indirectly discriminated against workers who had a combination of full and part-time service.

The claimant worked as a full-time employee with MDU until March 1991.  Following the birth of her daughter, the claimant commenced working on a part-time basis and continued to do so until her retirement in January 2015.  The scheme calculated that she had worked 21 full-time equivalent years out of the possible 28 full-time years she had been in service and a reduction was therefore applied to her pension.   

Amongst other matters, she claimed that MDU had breached the sex equality rule under section 67 of the Equality Act 2010.  In bringing this claim, the Tribunal identified the correct comparator as being someone who was the same age as the claimant, working full-time and who had commenced employment at the same time as the claimant.  It found that the comparator would have accrued pension at the same rate as the claimant and that she was not, in its view, being paid less by way of pension entitlement than a full-time worker.  The Claimant appealed, arguing that the choice of comparator was wrong.  In doing so, she sought to rely on a man of the same age retiring on the same date as her with 21 years’ full-time service.  

The EAT did not find that the Tribunal had made an error in its choice of comparator and rejected the claimant’s choice on the basis that it would fail to give effect to an important element of the scheme (i.e. that the accrual rate depended on the age at which the member joined).

As part of its Judgment, the EAT followed an earlier Supreme Court decision and found that an employer is able to rely on a later justification of a potentially discriminatory practice – even if it was not in its mind when it adopted the practice in the first place. 

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