Assessing compensation: treatment of PHI payments arising from workplace flexi-benefits scheme (Colt Technology Services v Brown)

Article summary

Employment analysis: In a claim under the Equality Act 2010, a claimant will generally not be compensated for loss avoided. There is an exception to this principle, however, where the claimant has contributed directly or indirectly to a Permanent Health Insurance (PHI) policy and receives income protection payments. In circumstances where the contributions towards a PHI policy were in part paid under the employer’s compulsory employee benefit scheme (50% income protection) and in part as a result of choices made by the claimant under the workplace flexi-benefits scheme (to enhance the level of protection to 75%), the employment tribunal was entitled to find that the claimant had indirectly paid the contributions for the additional cover because he chose to receive that benefit instead of increased salary. As a result, only the income protection payments of 50% (rather than 75%) were to be deducted when assessing loss, according to the EAT.