In Whitham (W) v Capita Insurance Services Ltd, W was on long-term sick leave. He received benefits under permanent health insurance (PHI) provided by a third party insurance company. He was told that the payments would stop when he turned 55. A tribunal found that this amounted to both direct and indirect discrimination* so it was for the employer to prove that the act was a proportionate means of achieving a legitimate aim if it was to escape liability. The tribunal rejected the employer’s justification argument, i.e. it was a proportionate means of achieving the aim of admitting as many employees as possible to the PHI scheme. The principal aim was purely budgetary as the employer was only prepared to put a certain amount of money into the PHI premium payment and it stopped W’s membership of the PHI on the ground of cost when it found out that the insurance company was not prepared to indemnify the employer any further. A cost alone argument is not acceptable – equal treatment cannot depend on how much money happens to be available – and as far as direct discrimination is concerned, the additional requirement that the aim must be consistent with the social policy aims of the UK was not present.
* The Equality Act 2010 (Schedule 9 paragraph 14) does provide a statutory exception to the age discrimination provisions to allow employers to stop providing access to insurance or a related financial service to employees when they reach age 65, or the state pension age, whichever is higher. So employers need to justify withdrawing PHI at any age lower than the exception allows for.
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