That’s the thing with employment law: you think a particular point is settled and then a new case comes along that changes it. The case in question, Mayor and Burgesses of the London Borough of Lewisham v Malcolm, is not even an employment case, but it does involve the Disability Discrimination Act 1995 and it will have implications for employers.

Lewisham Council wanted to evict Mr Malcolm because he had sublet his council flat contrary to the terms of his tenancy agreement. In an attempt to avoid eviction Mr Malcolm brought a claim under Part III of the DDA 1995 (which is drafted in similar terms to the employment provisions in Part II) arguing that he was a disabled person within the meaning of the Act because of his schizophrenia and that any breach of his tenancy agreement had been caused by his schizophrenia.

He claimed that the Council’s attempts to evict him for breaching the agreement amounted to less favourable treatment for a reason related to his disability and were therefore unlawful. His claim went all the way to the House of Lords.

Whilst there was some dispute about whether Mr Malcolm was a disabled person for the purposes of the Act, the key issues in this case were (i) whether the Council’s treatment of Mr Malcolm “related to” his disability and (ii) whether it had treated him less favourably than it would have treated others to whom that reason did not apply. In order to address these issues the Lords asked themselves a number of questions. Though self-evident in this case to some extent the questions would also be applied in a pure employment claim.

(i) What was the treatment complained of? It was common ground that Mr Malcolm was complaining about the Council’s attempts to evict him.

(ii) What was the reason for the treatment? On the face of it, Mr Malcolm’s decision to sublet his council flat in breach of his tenancy agreement.

(iii) Did that reason “relate to” Mr Malcolm’s disability? The Council said that it did not know about Mr Malcolm’s schizophrenia at the time it sought to evict him and that its decision was therefore purely a housing management decision and had nothing to do with his disability. Mr Malcolm argued that the Council’s knowledge (or lack of it) was irrelevant. The House of Lords disagreed. It said that in order to “relate to” Mr Malcolm’s disability there had to be some connection, not necessarily close, between the reason for the treatment and his disability. A “reason” could not “relate to” a disability unless the fact of the physical or mental condition had played some causative part in the decision-making process of the alleged discriminator. As the Council did not know about Mr Malcolm’s disability at the time it sought to evict him it could not be said that the reason for evicting him “related” to his schizophrenia, even if as a fact, the act on his part which had led to its taking that decision was the product of a disability.

Employers tempted to turn a blind eye to an employee’s potential disability on the basis that if they do not know of it they cannot be held liable should bear in mind that they will still be deemed to have such knowledge if they ought reasonably to have known he was disabled, for example if the symptoms were obvious.

(iv) Was it less favourable than the treatment of others to whom that reason did not apply? In order to answer this question the Lords had to agree on the correct comparator for disability discrimination purposes. Should the “others” with whom Mr Malcolm had to be compared be: (a) tenants without a mental disability who had, like him, sublet and gone to live elsewhere; or (b) tenants of flats who had not sublet or gone to live elsewhere?

The leading case on this point is Clark v Novacold in 1999 which will be familiar to most HR professionals. It concerned an employee who had suffered serious injuries that meant he was going to be kept off work for about a year. He was dismissed from his employment for that reason and he brought a claim of disability discrimination on the basis that he had been treated less favourably than others to whom that reason did not apply. It was accepted by both parties that any employee who had been absent from work for a year but who did not have a disability would also have been dismissed, but the Court of Appeal held that the correct comparator should actually be an employee who was medically capable of doing his job and who would not be off work for a year. As such an employee would clearly not have been dismissed the Court of Appeal held that Mr Clark had been less favourably treated. The issue then became whether that less favourable treatment could be justified. This clearly imposed a heavy burden on employers.

On the Court of Appeal’s reasoning Mr Malcolm’s treatment had to be compared with tenants of flats who had not sublet or gone to live elsewhere, i.e. people it would have no need or wish to evict. This does sound mildly offensive to common sense, in that it would require the Council to justify eviction for a breach of its rules and so provide Mr Malcolm with a significant advantage over a non-disabled tenant guilty of the same behaviour.

The House of Lords said the Court of Appeal in Novacold had been wrong. It said that Mr Malcolm’s treatment should not be compared with tenants who had not sublet but with tenants who did not have a mental disability who had still sublet and gone to live elsewhere, ie. where the distinguishing factor was only the presence or otherwise of a legal disability and not any acts or omissions arising from it as well. It said in effect the question of whether Mr Malcolm’s breach of the rules had been caused by his disability was irrelevant. 

As non-disabled tenants doing the same thing would also have been evicted by the Council Mr Malcolm could not demonstrate that he had suffered less favourable treatment at its hands. His claim was therefore bound to fail.

Their Lordships accepted that the relevant section of the DDA 1995 could be read both ways. One interpretation (adopted by the Court of Appeal in Novacold) gives the Act an extraordinarily far-reaching approach and the other (adopted by the House of Lords) gives the provisions a much more restrictive effect, more in line with the other discrimination regimes.

This decision is good news for employers, as Employment Tribunals will be required to interpret the employment provisions of the DDA 1995 in a similar way. As such it will be harder for claimants to succeed in claims of disability discrimination – or at least those that revolve around allegations of less favourable treatment. Take Mr Clark in the Novacold case. According to the House of Lords, his treatment would now be compared with somebody who will be off work for a year for a non-disability related reason. If the employer can show that such an employee would also have been dismissed then the disabled employee will be unable to satisfy the test of less favourable treatment and so the question of justification for it will never arise.

This is not to say that employers now have carte blanche to dismiss all disabled employees who are long-term sick. Employers should still act with caution when contemplating dismissing such employees, not least because they are still under an obligation to comply with their duty to make reasonable adjustments. Tribunals may well be more likely to find that it would have been a reasonable adjustment to discount any disability-related absences if to hold otherwise might leave a claimant without a remedy.