Disability discrimination: Pay protection may be a reasonable adjustment
Published 6 September 2016
In this case, the EAT held an employer might be under an obligation to continue to pay an employee their previous salary when, because of their disability, they have been moved to a lower paid job.
Mr Powell was employed by G4S Cash Solutions (UK) Ltd (G4S) as an engineer responsible for maintaining cash point machines. He developed lower back problems which amounted to a disability, and because of this, he could no longer perform this role. He was given a newly created role, a "key runner", and G4S continued to pay him his original engineer's salary. He understood this to be a long term arrangement, though G4S disputed that there was a variation of his contract of employment.
The next year, G4S was considering discontinuing the key runner role for operational reasons. It gave Mr Powell a list of alternative vacancies for him to consider, and told him that, if nothing was suitable, he would be dismissed on medical grounds. Mr Powell raised a grievance, arguing that G4S was attempting to change his terms and conditions. G4S decided to make the key runner role permanent, but that it would pay him 10% less than he was paid for as an engineer, on the basis that the key runner role did not require his engineering skills. Mr Powell did not wish to accept the 10% reduction in pay, and was dismissed.
Mr Powell brought claims of unfair dismissal and disability discrimination.
Mr Powell claimed that he and G4S had agreed to vary his contract to the effect that he could continue the key runner role on his original salary. The Employment Tribunal held that there had been no such variation, and that an employer could impose a reasonable adjustment on an employee without the employee's consent. The EAT disagreed with this. It held that an employee is entitled to decline a reasonable adjustment if it is incompatible with the terms of the employment contract. Here, there had been a variation of contract, although the details of this variation were unclear – for example, how long it was intended to last, or how it could be brought to an end.
The Employment Tribunal also held that it was a reasonable adjustment to employ Mr Powell as a key runner on his previous salary, and (by not doing so) G4S had discriminated against him. G4S appealed this.
The EAT held that there is no reason why pay protection cannot, in principle, be a reasonable adjustment. However, it made it clear that this would not always be the case. Whether or not it would be "reasonable" would depend on the facts of the particular case: an obligation on an employer to make up an employee's pay long term to any significant extent is unlikely to be an everyday event. The EAT also distinguished between single claims, as this was, where the cost is limited, and claims which, if successful, would inevitably apply to many others and have significant financial as well as policy implications for the employer, as would normally be the case in a claim for enhanced sick pay.
What does this mean for employers?
It is clear that employers will not always have to protect employees' pay when changing their roles for disability related reasons. Whether or not this would be a reasonable adjustment will always depend on the specific circumstances. The EAT judge also pointed out that what was a reasonable adjustment may at some time cease to be reasonable –the need for a job may disappear, or the circumstances of a business may alter.
However, employers should consider carefully their reasons for not protecting pay for disabled employees moving to new roles because of a disability. Cost may be a reason to argue that pay protection is not a reasonable adjustment, but tribunals will look at this in the context of the employer's resources and whether or not there would be wider cost or policy ramifications.
In this case, the main objection given by the employer against paying Mr Powell at the higher rate was that it would cause discontent amongst other employees if they came to know that Mr Powell had received special treatment. The Employment Tribunal had little sympathy with this reasoning, saying that G4S could have told discontented employees that it was complying with a legal obligation, and also that there was no evidence that anyone had complained throughout the time Mr Powell had already performed the key runner role on the higher salary. This shows that employers must be prepared for their objections to an adjustment to be closely scrutinised.