Is pay protection a reasonable adjustment under employment law?
Pay protection is potentially a reasonable adjustment under employment law, according to the Employment Appeal Tribunal in a recent case where it considered whether a disabled employee moved to a lesser role was entitled to receive the higher salary of his previous role as a reasonable adjustment.
Employers are under a duty to make reasonable adjustments to help disabled job applicants and employees in certain circumstances. The duty to make reasonable adjustments applies where a ‘provision, criterion or practice’ applied by or on behalf of an employer puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled.
Whether any potential adjustments are required will depend on whether they are reasonable in the circumstances. Adjustments can ranges from making adjustments to premises to the provision of training and support or modifying employees’ working hours. There is no exhaustive list of adjustments that can be made.
Only an Employment Tribunal (ET) can decide whether an adjustment could have been reasonable to make in the circumstances. In doing so it will take into account a number of factors such as the cost of the adjustment v the employer’s financial resources.
The case in question is G4S Cash Solutions (UK) Ltd v Powell. G4S Cash Solutions (UK) Limited (G4S) maintained automatic teller machines (ATMs) and replenished them with cash. It employed two types of engineers for this purpose. There were first line maintenance engineers (FLMs) and single line maintenance engineers (SLMs). SLMs were more highly paid than FLMs as they required more training.
Mr Powell began working for G4S in 1997. He worked in a variety of roles, including as an FLM and an SLM. Due to back problems Mr Powell could no longer perform his SLM role.
In the summer of 2012 G4S had a reorganisation and created a new role which involved driving from G4Ss depot to various locations to deliver keys and parts to engineers. This was known as being a “key runner”.
Mr Powell began to work as a key runner as he could no longer perform the role of SLM. Mr Powell received his original salary as if he was still a SLM.
By May 2013, G4S was considering a reorganisation of its services. The role of key runner would be removed. Mr Powell was told that the role was not permanent. Mr Powell was invited to look through a list of vacancies and consider what alternative work he would be able to do. If there were no other suitable roles Mr Powell would be dismissed on medical grounds.
Mr Powell submitted a grievance and G4S made the role of key runner permanent. However, G4S said that the key runner role was subject to a lower rate of pay. Mr Powell’s salary would be reduced by 10 percent. Mr Powell was unwilling to accept this reduction. No suitable vacancy could be identified. Mr Powell was therefore dismissed. Mr Powell brought proceedings in the Employment Tribunal against G4S which included claims for unfair dismissal and discrimination arising from a disability.
Employment Tribunal (ET)
In relation to Mr Powell’s salary, the ET found that G4S failed to make the reasonable adjustment of allowing him to work as key runner at the higher salary rate. The dismissal amounted to discrimination arising from disability and was unfair.
Employment Appeal Tribunal (EAT)
On appeal, G4S argued that the ET’s approach was contrary to the purposes of the reasonable adjustments legislation. G4S submitted that the purpose of the legislation was to assist disabled persons to obtain employment and to integrate them into the workforce; not to treat them as “objects of charity”. G4S also argued that if it applied this practice across the board to persons with a disability then it might have significant financial implications.
In response, Mr Powell argued that the employer’s duty is to alleviate a disadvantage to disabled persons to the extent that it is reasonable to do so. G4S had put forward no financial evidence to suggest that it was unable to pay him at the higher rate.
The EAT noted that protecting someone’s pay in these circumstances was no more of a cost to an employer than any other form of cost. Generally speaking reasonable adjustments require the employer to pay something. It would not be common for an employer to make up an employee’s pay in this way, but there would be cases where this may be a reasonable adjustment. Each claim would depend on its own facts.
The EAT concluded that the ET had considered the financial evidence advanced by G4S. This consideration was relevant as it had a bearing on the question as to whether it was reasonable for G4S to have to maintain Mr Powell’s higher salary. The main reason that G4S had put forward for not paying Mr Powell the higher rate was said to be the likelihood of discontent from other employees. G4S’s appeal on this issue was dismissed.
As stated at the outset, while an employer will not breach the duty unless it fails to make adjustments which are reasonable, there is no exhaustive list of adjustments which can be made. This is a fact sensitive question and will in each case depend on its own facts. Where an employer fails to comply with the duty to make reasonable adjustments, the ET may award unlimited compensation.
The small print: This blog is for information purposes only and should not be construed in any way as providing legal advice.
Get in touch
If you would like to discuss an employer’s duty to make reasonable adjustments, please contact one of our employment team to discuss.
The latest developments in Occupational Health
It’s an emergency! A guide to ‘time off for dependants’
Menopause Awareness Day 2023 and beyond – How can employers support menopausal employees?
UK Supreme Court issues judgment in holiday pay case
Can a dismissal be fair when there has been no hearing in front of the decision maker?
Employment Relations (Flexible Working) Act 2023
BSI guidance on menopause and menstruation
Guidance given to employers when considering expression of protected beliefs
Call us for free on 0330 912 0294 or complete our online form below for legal advice or to arrange a call back.