This e-bulletin includes short summaries of the following recent developments. Please contact us if you would like more information.  

1. Disability discrimination: duty to make reasonable adjustments to attendance management policy

Employers should take particular care when applying an attendance management policy to disabled employees. Overruling previous EAT authority (see our blog post), the Court of Appeal has confirmed that employers are subject to a duty to make reasonable adjustments to an attendance management policy where an employee's disability makes them more likely to be absent from work than non-disabled colleagues.

Although such a policy is applied equally to disabled and non-disabled employees (and may even include a discretion to apply it more leniently to disabled employees), the case should be analysed as the imposition of a requirement to maintain a certain level of attendance at work to avoid sanction; viewed in this way, it does put disabled employees at a disadvantage where their disability increases the likelihood of sickness absence. Therefore the duty to make reasonable adjustments does arise.

The Court did not interfere with the tribunal's ruling that, on the facts, the adjustments suggested by the employee were not reasonable. It was not reasonable to expect the employer to write off an extended period of absence of 62 days when applying the policy (which provided for formal action after 8 days' absence), as it was not a one-off condition and the medical evidence suggested that further periods of potentially lengthy absence were likely. However, where a disabled employee is likely to be subject to limited and only occasional absences, it may be a reasonable adjustment to extend the trigger point.

Employers should also bear in mind that, where an employee is disciplined or dismissed based in part on disability-related absence, the employee can also claim discrimination arising from disability, which will be unlawful unless the employer can justify the treatment as a proportionate response in all the circumstances. This will be an option for employees even where there are no reasonable adjustments required. (Griffiths v Secretary of State for Work and Pensions)

2. Disability discrimination: cases highlight recruitment risks for employers in relation to references and interviews

Where a prospective employer receives an unsatisfactory reference about an applicant's suitability for a role, in circumstances where they have been given information about the applicant's medical treatment and absences from work suggesting disability may be in issue, the prospective employer should enquire further to ascertain whether the reason for the negative opinion is the applicant's disability or disability-related sickness absence. If it is, the employer should only withdraw the offer if this can be justified.

In Pnaiser v NHS England & anor, the withdrawal of a job offer in response to a negative reference was held to be unlawful discrimination arising from a disability. It was inferred that the reason for the ex-employer stating that the applicant would be unsuitable for the role was her disability-related absence. The withdrawal of the offer was because of the reference, and therefore because of something arising from disability, and the prospective employer was fixed with constructive knowledge of the applicant's disability given its knowledge of her undergoing surgical procedures and significant absence record. In this case the prospective employer's employee dealing with the application was a medical doctor, but an experienced HR practitioner might equally be fixed with constructive knowledge of disability if aware of significant sickness absence.

Employers must also bear in mind the potential for disadvantage to disabled applicants in determining their recruitment process. A recent ET case, Waddingham v NHS Business Services Authority, highlighted the need for employers to consider alternatives to competitive interview when assessing disabled employees for a vacant post. Where a disabled employee was disadvantaged at interview as a result of disability (the employee was undergoing treatment for cancer), the employer should have considered assessing the employee's capabilities in a different way, using information from his previous work performance and appraisals. This was required even though the employee was willing to go ahead with the interview and downplayed the impact of his disability, as the employer could reasonably have been expected to know that the employee would be disadvantaged. Although it was not a reasonable adjustment to lower the pass mark for the interview, there was a failure to make a reasonable adjustment in not assessing the employee in a different way. It is relevant that in this case the employee had long service, including experience relevant to the role; different circumstances will influence what is a reasonable adjustment.

The consequential failure to appoint the employee to the role was unjustified discrimination arising from disability. The parties accepted that the employer's aim of appointing the best person for the job was legitimate, but the employer's insistence on competitive interview was not a proportionate means to achieve it. It is interesting that the tribunal had some doubt as to whether appointing the best candidate could be a legitimate aim where a disabled candidate can lawfully be given more favourable treatment; in its opinion a more appropriate legitimate aim may have been to find a candidate who could perform the role to the required standard. However, this is the obiter view of a first instance tribunal; whether appointing the best person can be a legitimate aim would surely depend on all the circumstances including the importance of the role and size of employer.

3. Autumn statement: employment law announcements

The Autumn Statement by the Chancellor on 25 November 2015 included the following:

  • The apprenticeship levy will be introduced in April 2017 at a rate of 0.5% of an employer's paybill (ie, total employee earnings excluding benefits in kind), to the extent that it exceeds £3million (achieved by giving employers an annual allowance of £15,000 against the levy; note only one allowance for connected companies). It will be collected by HMRC through PAYE. Employers in England will be able to access funding through the Digital Apprenticeships system.
  • There will be an upper income limit of £100,000 per parent and a minimum weekly income level equivalent to 16 hours per parent (worked at the National Living Wage) to be eligible for the new tax-free childcare scheme (due to be launched in 2017).
  • The government intends to increase funding for the Fit for Work Service and to publish a White Paper in 2016 setting out reforms aimed at improving support for people with health conditions and disabilities, and exploring the role of employers in increasing the employment of disabled people.
  • From 6 April 2016, tax relief for travel and subsistence expenses will be restricted for workers engaged through an employment intermediary, such as an umbrella company or a personal services company. There will also be a call for evidence on the current tax treatment of employer provided living accommodation, and simplification of the tax rules on employee share schemes. The government is still considering whether to take action in relation to the growth of salary sacrifice arrangements.
  • No announcement was made following the HMRC consultation on proposed reforms to the taxation of employment termination payments. HMRC has indicated that the responses to the consultation highlighted the complexities of the issue and further consideration is therefore required.
  • New advisory fuel rates for employers with company car schemes, which apply to all journeys made on or after 1 December 2015, have been published here.
  • The Department for Work and Pensions has confirmed that the rates for statutory maternity, adoption, paternity, shared parental and sick pay will remain unchanged for 2016/17.

4. Contract: Supreme Court clarifies test for implying terms The Supreme Court has recently clarified the law on when the court can imply a term that the parties have not expressly included in their contract, endorsing the traditional approach that the term either must be so obvious as to go without saying or must be necessary to give business efficacy to the contract. Further details are included in the HSF Litigation blog post here. (Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited)

5. Privilege: High Court confirms legal advice privilege can include lawyer’s summary of facts

A High Court decision has confirmed that the protection of legal advice privilege is not restricted to actual legal advice. The privilege will protect other information communicated from the lawyer to the client (or vice versa) to enable the lawyer to advise and the client to make informed decisions in a relevant legal context. This may include references to matters in the public domain or to meetings and correspondence that would not, in themselves, be privileged.  See the HSF Litigation blog post here for further details. (Property Alliance Group Limited v The Royal Bank of Scotland Plc)

6. New publications