Since the abolition of the default retirement age some time ago, questions have arisen regarding what happens to employee benefits should they decide to remain in employment over a certain age.
In the recent case of Smith v Gartner UK Ltd, Ms Smith (the Claimant) was absent from work on the grounds of sickness and had been receiving payments under Gartner UK Ltd’s (the Respondent) Permanent Health Insurance (PHI) scheme during this time. In line with the terms of the PHI policy that the Claimant had originally signed up to in 2003, these payments were stopped when the Claimant reached the age of 60.
Of further note is the fact that the Respondents had in fact introduced a new PHI scheme in 2007 which provided employees with cover until the age of 65.
In response to the cessation of her benefits, the Claimant brought a claim for direct age discrimination against the Respondents, arguing that by not continuing the payments beyond the age of 60 they had treated her less favourably as a result of her age and could not justify this decision.
Ms Smith’s claim was rejected by the Employment Tribunal and she subsequently appealed to the Employment Appeal Tribunal (EAT) who rejected her appeal on the basis that the reason her payments ceased at the age of 60 was purely because the terms of the policy she had signed up to dictated that this be the case. This was therefore not a decision made by the Respondent and as such could not be deemed an act of discrimination.
The EAT further decided that the Respondent’s decision not to extend the benefits of the PHI policy introduced in 2007, could similarly not be deemed discriminatory. As the Claimant was already receiving benefits under the old PHI policy and was not actively working, she did not satisfy the conditions of the new scheme.
In light of the above, Employers could be advised that they are not under an obligation to offer additional benefits in excess of PHI schemes simply to avoid discrimination claims and that cases such as these may very much depend upon the terms of the PHI policy in question. It should also be noted that the Equality Act 2010 does allow Employers to cease offering PHI in addition to other insured benefits, at the age of 65 or the employee’s state pension age (whichever is the higher).
Beware however that this area of the law may well be subject to change in the future given the very different decision reached by the Employment Tribunal in 2013 in the case of Witham v Capita Insurance Services Ltd.Details