The Employment Appeal Tribunal (EAT) has held that it was a reasonable adjustment for an employer to continue to pay a disabled employee his original salary, after he was transferred to a lowerskilled role.
G4S Cash Solutions (UK) Ltd v Powell, EAT
Mr P suffered from back pain and became unable to fulfil his duties as a single-line maintenance engineer, responsible for maintaining ATM machines. In 2012, following a period of sickness absence, he was transferred to an alternative role that did not require engineering skills. He continued to be paid his original salary. The following year he was informed that the role was not permanent and that the company was considering discontinuing it. The company subsequently decided to make the role permanent, but at a lower rate of pay. Mr P refused to accept the pay reduction and was dismissed.
An employment tribunal held that Mr P’s dismissal was unfair and amounted to discrimination arising from disability. It also found that his employer should, as a reasonable adjustment, have continued to pay his original salary on a permanent basis. The employer appealed the tribunal’s decision on the reasonable adjustment point.
The EAT dismissed the appeal and agreed that the employer should have continued to pay Mr P at the higher level, as a reasonable adjustment.
The EAT confirmed that if an employer proposes a reasonable adjustment that is incompatible with the employee’s contract of employment, the adjustment will not be effective without the employee’s consent. The EAT was satisfied that Mr P’s contract had been varied in 2012.
It is well established that the reasonable adjustments duty may require an employer to treat a disabled employee more favourably than others, and that the duty may include transferring an employee to a different role. In the EAT’s view, pay protection is no more than another form of cost for an employer, analogous to the cost of providing extra training or support to a disabled employee. The legislation envisages an element of cost to the employer and therefore it is a step that could fall within the requirements of the legislation; the question in each case is whether it is reasonable for the employer to take that step.
The EAT was careful to conclude that it will not be an ‘everyday event’ for an employer to provide long-term pay protection, but that it might be a reasonable adjustment as part of a package to get the employee back to work or to keep an employee in work.
The EAT’s decision in this case is, at first sight, alarming for employers given the previously accepted position that if a disabled employee has to reduce his or her hours due to their disability, or carry out an alternative role, the employer does not need to protect their pay at the original rate. However, the decision only goes as far as saying that pay protection should not be discounted as a reasonable adjustment; it will not be appropriate in all cases and for all employers (particularly those with limited resources).
Unfortunately, the EAT’s decision provides little general guidance on when pay protection would be appropriate. In this case, the employer had continued to pay the employee at the higher rate of pay for around a year, leading him to believe that the arrangement would be long-term. The tribunal also concluded that the company had substantial resources and the additional cost of employing Mr P was easily affordable.
We think it is likely that this case will be appealed to the Court of Appeal, so look out for further developments.