Aron Pope considers the House of Lord’s reasoning in its decision in Mayor and Burgesses of the London Borough of Lewisham v Malcolm which overturned the previous comparator test for disability discrimination claims.
In a majority decision, the House of Lords overturned the Court of Appeal’s decision in Clark v TDG Ltd t/a Novacold which had previously established the test of the correct comparator in disability discrimination cases.
Whilst the question considered by the House of Lords in Mayor and Burgesses of the London Borough of Lewisham v Malcolm  UKHL 43 related to the provision of goods and services under Part III of the Disability Discrimination Act 1995 (“the DDA”) and would not appear relevant to employment lawyers and HR professionals, the decision will have wide-ranging consequences in the employment field as both parts of the DDA share a common definition of disability as well as disability-related discrimination.
Mr Malcolm benefited from a secure tenancy of his flat from Lewisham council (“the Council”). Malcolm suffered with schizophrenia and was meant to take prescribed medication to control this condition. In 2004 he stopped taking his medication for a period of several months. During this time he moved out of the flat and, in contravention of the terms of his tenancy, he sublet the flat. On discovering this, the Council commenced possession proceedings in the County Court.
By way of defence, Malcolm asserted that the Council’s decision to seek possession amounted to disability discrimination. He claimed that he made the decision to sublet the flat when he was not taking his medication for schizophrenia.
The County Court rejected Malcolm’s defence. They held that he was not disabled within the meaning of section one of the DDA at the relevant time and the decision to issue the notice to quit was unrelated to his medical condition. Malcolm appealed against the Court’s decision which allowed the Council to repossess his flat.
The Court of Appeal disagreed with the County Court and decided that Malcolm was disabled. They held that the evidence indicated that there was a causal connection between Malcolm’s disability and the Council’s decision to seek possession and that the Council had discriminated against him contrary to the provisions of the DDA. The Council appealed to the House of Lords.
When reaching their decision, the Lords pondered the following questions:
For the past nine years, employment lawyers have been working on the understanding of the relevant comparator test as established in Novacold. In an employment context the Novacold test meant that where a disabled employee was dismissed for long term sickness absence the correct comparator would be an employee who had not been absent. However, in this instance, the correct comparator under the Novacold test would be a non-disabled tenant who had paid the rent.
The majority of their Lordships disagreed that the comparator under the Novacold test was correct, and instead considered that the correct comparator was someone who was not disabled but who had illegally sublet. This decision turned Novacold on its head.
In his judgment, Lord Scott gave an example specifically relating to the employment field. He said that in determining whether an employer had discriminated against a disabled employee by dismissing him for long-term sickness absence, it was pointless to make a comparison with treatment afforded to an employee who has not been absent which would have been the required comparison under the Novacold test.
The majority view was that it was not sufficient that there was some connection between Malcolm’s disability and his having sublet his flat. The appropriate test required disability to have played some part in the Council’s decision making process. Their Lordships found in this instance that the decision was purely related to housing management and had nothing to do with Malcolm’s mental capacity.
Their Lordships held unanimously that a respondent cannot be liable for discrimination unless it knows (or ought reasonably to know) of the claimant’s disability. However, the respondent does not need to appreciate that the claimant’s condition satisfies the statutory definition of disability. This finding by the Lords means that the EAT’s decision in London Borough of Hammersmith and Fulham v Farnsworth 2000 IRLR 691 can no longer be considered good law.
The decision in Malcolm has provoked much controversy since the judgment was handed down in June 2008. In her dissenting judgment Baroness Hale of Richmond said that she was “sorry that the settled understanding of employment lawyers and tribunals is to be disturbed.”
The good news for employers is that the reversal of the Novacold comparator test ought to make it harder for employees to bring successful DDA claims. This is because the comparator in, for example, a sickness absence context will be someone who does not have the disability complained of but who has also been absent. It is likely that this will make it easier for employers to persuade a tribunal that it would have taken the same action in respect of an employee who had an extended period of absence. However, employees will continue to bring claims if they are dismissed for long term sickness absence on the grounds that it is a reasonable adjustment not to dismiss. Employers must also take care to ensure that the statutory dismissal procedures are complied with (to avoid successful claims of unfair dismissal) and consider whether there is any other liability (for example, in respect of health insurance) before reaching a decision to dismiss an employee on long-term sickness absence.
It should not be necessary for employers to amend their policies and procedures in light of the decision at this stage, and whilst the decision in Malcolm was reached by the highest court in the land, it is likely that the issue will continue to be the subject of litigation. Further, the forthcoming Equality Bill will provide Parliament with the option to review the matter afresh and this could result in another change to this important area of discrimination law.
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