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Age discrimination: An employer did not subject an employee to age discrimination when his PHI benefits stopped when he was 65

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By Ceri Fuller & Hilary Larter


Published 04 August 2022


The EAT has upheld an employment tribunal judgment that an employer did not subject an employee to direct age discrimination when his PHI benefits ceased at the age of 65.

The EAT has upheld an employment tribunal judgment that an employer did not subject an employee to direct age discrimination when his PHI benefits ceased at the age of 65.


The Equality Act 2010 states that it is not discriminatory to remove insurance benefits when an employee reaches the age of 65 or the state pension age, whichever is later. 

Mr Pelter was employed by Buro Four Project Services Ltd. Under his contract of employment, he was eligible for PHI benefits, subject to the rules of the scheme.  The PHI scheme provided that once a member was incapacitated, the terms and conditions of the policy which were in place immediately before their incapacity would determine the level of their benefit and that membership ceased when the employee reached “terminal age” of 65.  At the time that the PHI scheme commenced, the state pension age was 65. For men this increased from 65 to 66 in 2012.

In 2011, when Mr Pelter was 56, he became incapacitated for work.  Buro submitted a claim under the PHI scheme which was accepted in 2013.

In 2019, Mr Pelter was given notice of termination of employment, to expire at the end of 2020, when Mr Pelter was 65.  He stopped receiving PHI benefits when he was 65.

Mr Pelter claimed in the employment tribunal that Buro had subjected him to direct age discrimination because the PHI cover it provided did not provide payments after his 65th birthday.  He argued that Buro should have updated the PHI policy to comply with the Equality Act 2010 so that benefits could be extended to his 66th birthday.  He also argued that Buro should have transferred him to a PHI policy which would pay beyond his 65th birthday.  

The employment tribunal dismissed Mr Pelter’s claim.  He appealed to the EAT, which upheld the tribunal’s judgment.  Key points in the tribunal and EAT’s judgments were that:

  • During the period that Mr Pelter was provided with access to the PHI scheme, the Equality Act 2010 permitted employers to provide employees with access to PHI benefits which ceased at state pension age, which was then 65.
  • Mr Pelter ceased to have access to the PHI scheme when his situation crystallised, which was when he became incapacitated, a year before the state pension age increased to 66.
  • It was the insurer, not Mr Pelter’s employer, that ceased payment when he reached 65.
  • An employer cannot provide renewed insurance cover in respect of an event (i.e. Mr Pelter’s incapacity) that has already occurred.


The EAT considered that if Mr Pelter had still been at work when the state pension increased to 66, it would have been strongly arguable that Buro should have sought insurance under which benefits were payable to age 66 (although Buro could still theoretically defend a direct age discrimination claim by showing the age by which PHI payments ceased was objectively justifiable).  Employers should keep the terms of their PHI scheme under review, and consider seeking new insurance when the state pension age rises.  This case was brought on the basis of accessing the scheme. The claim could also have been brought, in the alternative, on the basis that Mr Pelter had been directly discriminated against as to the terms of his employment. This would have been harder for the employer to defend because it would have not been the case that once the benefit is crystallised, it was no longer a matter of ‘access’ to a benefit which had been triggered.

Mr D Pelter v Buro Four Project Services Ltd