UK employers take note – the Employment Appeal Tribunal has recently ruled that an employer was obliged to continue paying a disabled employee his full salary even though he had been redeployed into a less well paid role because he could no longer carry out his normal duties as a result of his disability. Such a step constituted a “reasonable adjustment” for disability discrimination purposes, said the EAT.
Mr Powell was a service engineer for G4S. Due to back problems he became unable to carry out his normal duties and began to work as a “key runner”, delivering keys and parts to other engineers. Powell understood this change of role to be long-term, but this was subsequently disputed by G4S and when it told him one year later that he could only continue in this alternative role if he accepted the lower rate of pay that went with it, Powell objected and was ultimately dismissed.
When this matter came before the Employment Tribunal (and subsequently the EAT) it was accepted by all parties that the duty to make reasonable adjustments had been triggered. The key question in this case was whether it was a reasonable adjustment for G4S to employ Powell as a key runner but on the 10% higher salary of an engineer.
Previous case law in this area might have led you to think that this would be a step too far for employers to have to take, but apparently not. The EAT said that it could see no reason in principle why pay protection should be excluded as a reasonable adjustment. Take the situation where there is a choice between retaining a disabled employee in an existing role (and paying for support and assistance to keep him there) or transferring him to a new role where no support or assistance is required but the pay is lower – why, said the EAT, would it not be a reasonable adjustment for an employer to have to protect the employee’s pay? After all, the latter may in some situations be less costly for the employer than the former.
The EAT Judge went on to say that: “I do not expect that it will be an everyday event for an Employment Tribunal to conclude that an employer is required to make up an employee’s pay long-term to any significant extent – but I can envisage cases where this may be a reasonable adjustment for an employer to have to make as part of a package of reasonable adjustments to get an employee back to work or keep an employee in work. They will be single claims turning on their own facts. ”
Rather unhelpfully this case says that it may be a reasonable adjustment for an employer to offer pay protection to a disabled employee, but it doesn’t offer any practical guidance on when this would be. As always, each case will be decided on its own particular facts and what is reasonable for one employer or employee will not necessarily be reasonable for another. In this case, for example, the EAT was clearly influenced by the fact that G4S had already paid Mr Powell at his higher salary for a year without complaint, that it had led him (though inadvertently) to believe that the arrangement was long-term and that the only reason put forward by G4S as to why it should not be required to continue to pay him at this rate was that it would cause employee discontent if others found out about his special treatment. This was a reason described by the EAT as “unattractive”, bearing in mind G4S’s legal obligation to make reasonable adjustments for a disabled employee and also that there was no evidence of any such discontent over the preceding year anyway. It is possible to suggest that this maybe overlooks industrial reality to some extent. I may see a disabled peer get special aids or support and not resent it because I don’t need it and he does, but the disabled employee doesn’t need a higher salary any more than I do and so the chances of my minding are very much greater.
On one level you can see where the EAT was coming from in this decision – the duty to make reasonable adjustments clearly envisages an element of cost for employers, but there is a difference between doing this for one employee where the cost may be relatively limited and doing this for more employees, which could have serious financial implications for an employer.
As the EAT talked about pay protection being relevant “as part of a package of reasonable adjustments” it would be sensible for employers (especially large employers with greater financial resources) to at least address their mind to this issue when redeploying disabled employees into lower paid roles. Factors such as the additional cost to the business of having to do this, the likely length of any such arrangement, the number of disabled employees who are redeployed into alternative roles, etc., are all likely to be relevant when making such a decision.