Protecting the pay of a disabled employee
Thursday, 20th October 2016
Since 2010 an employer must make reasonable adjustments to ensure that an employee who has a disability is not disadvantaged in their role compared to their colleagues who are not disabled. Failure to make such reasonable adjustments amounts to discrimination. An employer cannot pass on the costs of making the reasonable adjustments to the employee. The EHRC Code highlighted that in exceptional circumstances the employer can transfer the disabled employee to a different role to fill an existing vacancy even if there is a more suitable candidate.
In G4S Cash Solutions (UK) Ltd v Powell (2015) an employment tribunal was asked to consider to what extent an employer ("G4S") is required to maintain a disabled employee's existing salary level when transferring them to a new role, as a reasonable adjustment.
The employee in question had been employed by his employer since 1997 in a variety of engineering roles; however due to an injury sustained to his back by mid-2012 it was accepted that he was now classified as disabled. After a period of sickness the employee returned to work in a new role of "key runner" as a reasonable adjustment whilst maintaining his existing salary, and he understood this change to be permanent.
In May 2013, G4S were considering discontinuing this role for organisational reasons. They invited the employee to look through a list of alternatives and if he couldn’t find one suitable that he would be dismissed on medical grounds.
After lodging a grievance with his employer they decided not to discontinue his role but to instead apply a lower rate of pay as it was a non-engineering role. The employee was unwilling to accept the pay reduction and was therefore dismissed.
At the initial hearing the tribunal held that there had been no agreed variation to his employment contract and therefore he was entitled to continue in the new role on his existing rate of pay. They came to the conclusion that a reasonable adjustment can be effective without the consent of the employee and therefore differs from a contract variation. The tribunal further concluded that the dismissal amounted to discrimination and therefore was unfair. Both parties appealed the decision, G4S appealed the reasonable adjustment finding and the employee cross-appealed on the contractual variation point.
"The Employment Appeal Tribunal ("EAT") held that the appeal of G4S was dismissed, upholding the tribunal's decision that G4S should have continued to employ the employee in his new role but on his existing pay as a reasonable adjustment. They did however find that the tribunal's conclusion that there was no contract variation was based on an error of law. In the EAT's view, if an employer proposes to make reasonable adjustments, it must do so with the employee's consent.
These situations must always be approached on a case-by-case analysis, taking into account all factors of the ECHR Code. In this case the employer had been paying the disabled employee his existing salary even whilst being in a more junior role for around a year. This led the employee to believe that the move was permanent. The main reason for reducing his pay put forward by the Company was to stop discontent with the other employees; the EAT described this as an "unattractive reason". This is a reminder that impact or anticipated impact on other employees is not a factor to be taken into account. Previous case law showed that when making a reasonable adjustment in favour of a disabled employee, the employee's consent was not required. This case shows that an adjustment which also amounts to a contractual change will not be effective without securing the employee's agreement.
Advice for employers
As an employer it is your responsibility to ensure that any disabled employees are not disadvantaged compared to other employees due to their disabilities. If you believe they are at a disadvantage it is your responsibility to decide what reasonable adjustments need to be made. Whilst redeploying them into a more junior role is acceptable it must be on their existing pay. Furthermore, if it amounts to a significant change in their current employment contract you must first seek their approval of such a contract variation.
If you would like further advice on protecting disabled employees, making reasonable adjustments or any other employment queries, please contact the Ashfords Employment Team.