An employer can be liable for disability discrimination if it treats an employee unfavourably because of something "arising in consequence of" a disability and the treatment is not objectively justified. However, the employer must know (or could reasonably be expected to have known) that the individual is disabled. The question for the Court of Appeal in City of York Council v Grosset was whether the employer also has to know that the unfavourable treatment is because of something arising in consequence of the disability. It found that it does not.

The employee was a teacher who suffered from cystic fibrosis, which his employer knew about. He was under increasing pressure at work and he found his workload difficult to manage because of the time-consuming exercise regime his condition required. This caused him significant stress. During this period he showed an 18 rated film to a class of 15 year olds, without approval from the school or parents. He was ultimately dismissed for this and brought claims of unfair dismissal and disability discrimination.

Medical evidence at the hearing, which was not available to the employer at the time of the disciplinary hearing, showed that the employee's mental state was impaired due to stress arising from his disability. The tribunal accepted that this led to his error of judgment in showing the film and that the dismissal was unfavourable treatment which arose in consequence of his disability. The dismissal was not justified because a formal written warning would have been sufficient to achieve the employer's legitimate aim of safeguarding children.

That decision was upheld by the EAT and by the Court of Appeal. The employer's argument that it could not be liable for discrimination arising from a disability if it did not know that there was a link between the disability and the misconduct failed. The Equality Act simply requires there to be unfavourable treatment for "something" – in this case the showing of the film – and for that "something" to arise in consequence of a disability. Whether there is the necessary causal link between the treatment and the disability is an objective question. It does not depend on whether the employer is aware that there is the necessary causal connection. There was no error in the tribunal's decision that the dismissal was not justified, so the employer's appeal failed.