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Pay protection and reasonable adjustments

The duty to make reasonable adjustments is an obligation that is unique to disability discrimination. It places a duty on an employer to help job applicants and employees where a provision, criterion or practice applied by the employer, places a disabled person at a substantial disadvantage compared with people who are not disabled. An employer is required to take reasonable steps to avoid that disadvantage by making reasonable adjustments. A reasonable adjustment can take various forms such as modifying equipment, introducing regular breaks or altering hours of work.

In the recent case of G4S Cash Solutions (UK) Ltd v Powell the Employment Appeal Tribunal (EAT) considered the scope of the duty to make reasonable adjustments; it held that a reasonable adjustment could not be imposed without an employee’s consent where it involved changes to contractual terms and conditions and, where reasonable, protecting an employee’s pay where a lower grade job has been offered, may be considered a reasonable adjustment.

Background

Mr Powell was employed by G4S Cash Solutions UK Ltd as a high level engineer. He had been suffering from lower back pain for some time and by 2012 it became clear, due to his disability, that he was unable to continue in his current role. Following a period of absence from work Mr Powell began an alternative role as a ‘key runner’ which was primarily a driving role; although the role was more junior the employee retained his original higher rate of pay as an engineer.

The employer subsequently raised concerns about continuing the key runner role and discussed the issue with Mr Powell, telling him that if no alternative could be found he would be dismissed on medical grounds. Mr Powell raised a grievance claiming his employer was trying to change his terms and conditions of employment following his appointment to the key runner role in 2012; ultimately G4S decided to retain the role but advised the employee that his rate of pay would be reduced (by around 10%) to reflect the fact the role was more junior and required no engineering skills. Mr Powell refused to accept the reduction in pay and was dismissed. He brought claims of unfair dismissal and disability discrimination against G4S on the following basis:

1. In 2012 his contract had been varied with agreement and since then he had carried out the role of key runner on a higher rate of pay and he was contractually entitled to continue with this arrangement

2. Under the Equality Act 2010 G4S had failed in its duty to make reasonable adjustments by its refusal to continue to pay him the higher salary

Decision

The Employment Tribunal held that there had been no variation of contract in 2012 when Mr Powell undertook the key runner role and he was not entitled to continue in that role on a permanent basis on a higher salary. However, in relation to the claim of disability discrimination, G4S had failed in its duty to make reasonable adjustments and should have continued to pay the higher salary to the employee.

Both parties appealed. The central issues for the EAT to consider were:

1. Can an employer impose a variation of contract for the purposes of a reasonable adjustment without the employee’s consent; and

2. Was it a reasonable adjustment for the employer to place the employee in the key runner role while retaining his existing pay?

In relation to point 1 the EAT held that there had been a valid variation of contract when Mr Powell became a key runner in 2012 and a subsequent variation to that contract could not be imposed without his consent; in relation to pay protection the EAT saw no reason why, in principle, the protection of an employee’s pay should not be considered a reasonable adjustment to prevent the employee being disadvantaged.

Practical points for employers to consider

1. Where an employer is proposing a reasonable adjustment which involves a change to an employee’s terms and conditions of employment, this cannot be done without the employee’s consent.

2. It should be made clear to the employee whether the change in role is considered to be permanent or for a fixed period of time.

3. Whilst maintaining an employee’s pay level as a reasonable adjustment is not an “everyday event” the EAT stated that it could “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.”

3. The fundamental question for employers is what is reasonable? Whilst salary retention will not be reasonable in every case this should be assessed on a case-by-case basis and will depend on factors such as the size and overall resources of the employer, the financial costs and other costs of making the adjustment and the overall practicability of making the step.

4. The likelihood of discontent or complaints from other employees in relation to an adjustment is not generally a key factor in deciding whether an adjustment is reasonable.

5. As a result of changing circumstances (such as redundancy or the economic status of a business), what was previously a reasonable adjustment may no longer be considered reasonable.

Blog posted 12 September 2016

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further