The question of what is ‘reasonable’ and the lengths that employers are required to go to in relation to making adjustments for employees with disabilities has been the subject of much uncertainty for several years.
However, in the case of G4S Cash Solutions (UK) Ltd v Powell, the Employment Appeal Tribunal (EAT) has answered the following questions:
- Is an employer required, as a reasonable adjustment, to continue to employ a disabled employee in a more junior role, at their existing rate of pay?
- Is an adjustment effective without an employee’s consent to the adjustment?
Reasonable Adjustments For Disabled Employees
Legal Background
Employers have a duty to make reasonable adjustments where they know (or ought reasonably to know) that a person has a disability and there is a provision, criterion or practice (PCP) which places the disabled person at a substantial disadvantage compared to those who are not disabled. A failure to make a reasonable adjustment amounts to discrimination and the duty is set out in the Equality Act 2010 (EqA 2010).
An employer who is under a duty to make reasonable adjustments is not entitled to require a disabled person to pay any of the costs of complying with the duty.
One of the possible adjustments highlighted by the 2011 Equality and Human Rights Commission’s Employment Statutory Code of Practice (the EHRC Code) is ‘transferring the disabled person to fill an existing vacancy’. Whilst the EHRC Code refers specifically to ‘existing’ vacancies, depending on the circumstances, employers might be required to redeploy a disabled employee even where no vacancy exists. This may involve creating a new role for the employee, or swapping a disabled employee’s role with that of another employee.
As transferring the employee to a new role will generally involve a change to their terms and conditions of employment, it cannot be done without the employee’s consent. Therefore, where an employee does not agree to the change, it will not be effective.
Case Facts
Mr Powell was employed by G4S (the Company) as a maintenance engineer, maintaining the Company’s ATM machines, from 1997 to 2013. Mr Powell suffered with back pain and by mid-2012 he was no longer fit for jobs involving heavy lifting or work in confined spaces. From this period onwards it was accepted that he was disabled under the EqA 2010.
During the summer of 2012, the Company created a new role of ‘key runner’ supporting ATM engineers. This role involved driving from the depot to various locations to deliver materials to engineers, enabling the engineers to travel by public transport. On his return from a period of sickness absence, Mr Powell ‘s role changed from maintenance engineer to key runner, as this involved less physical activity. Mr Powell understood this change to be long-term. Despite the change in role, Mr Powell’s pay was initially protected and he continued to receive the same level of pay as he did in his more skilled role as engineer.
By May 2013, the Company was considering discontinuing the role of key runner due to organisational changes. The Company informed Mr Powell and explained that the change of role had not been permanent and invited him to consider alternative vacancies. Mr Powell was told that if none of the alternative vacancies were suitable, he would be dismissed on medical grounds.
Mr Powell raised a grievance against the Company, claiming that it was trying to change the terms and conditions of his employment.
As a result of Mr Powell’s grievance, the Company decided to make the key runner role permanent, but it proposed a reduced rate of pay of around 10% to take account of the fact that Mr Powell was now performing a less skilled role.
Mr Powell refused the proposed pay cut and was dismissed by the Company as a result. He then lodged a claim for unfair dismissal and disability discrimination.
Employment Tribunal (ET) Decision
The ET rejected Mr Powell’s claim that there had been an agreed variation to his contract when his role changed from maintenance engineer to key runner, such that he was entitled to continue in that role at his original salary on a permanent basis. However, the ET went on to hold that the Company was required, as a reasonable adjustment, to continue paying Mr Powell his original higher level of pay despite the change in his role. As such, his dismissal was unfair and amounted to discrimination arising from disability.
In reaching its decision on the variation of contract claim, the ET held that an adjustment can be effective without the consent of the employee, and that an adjustment differs from a variation of contract, which requires an employee’s consent. In Mr Powell’s case, he had never received a new contract setting out the details of his new role and thus there was never a time when the parties agreed that his contract had been varied so to enable him to continue in his key runner role at his original salary as a maintenance engineer on a permanent basis.
The Company appealed against the reasonable adjustment finding and Mr Powell appealed against the contractual variation point.
EAT Decision
The EAT upheld the ET‘s decision, finding no reason in principle why the duty to make reasonable adjustments could not extend to protecting an employee’s pay on an indefinite basis in order to offset a disabled employee’s disadvantage.
The EAT stated that the objectives of the EqA 2010 clearly foresaw an element of cost to the employer in making reasonable adjustments, and ‘pay protection’ was one form of such a cost. Further, the EAT noted that the reasonable adjustments duty may require an employer to treat a disabled employee more favourably than others.
The EAT reiterated that the question for the ET will always be, was it reasonable for an employment to have to take that step to counteract a disabled employee’s disadvantage?
In relation to whether employee consent is required when imposing a particular adjustment, the EAT held that the ET’s conclusion that there had been no agreed variation to Mr Powell’s contract when he started the more junior role was an error of law. In the EAT’s view, if an employer proposes an adjustment which is incompatible with the terms of the contract, the employee is entitled to decline it: the adjustment will not be effective without agreement. In this case, it was clear that there had been a variation of the contract when Mr Powell returned from sickness absence to a different role.
The EAT considered that the question for the ET was not whether there had been a contractual variation, but what the terms of the variation were. In cases where employees are disabled, there may be no intention that the employee will return to the previous work.
Comment
As a result of this decision, employers should be extra vigilant and alert to the risks of a discrimination claim. They must carefully consider all of the circumstances of the disabled employee in question and not make any hasty decisions when it comes to making adjustments to cater for their disability.
It is important to emphasise that the effect of this decision is that protecting a disabled employee’s pay when they are redeployed should not be discounted. However, in every case, the reasonableness of potential adjustments must be assessed on a case-by-case basis, taking account of the factors set out in the EHRC Code, including the costs of making the adjustment and the financial and other resources available to the employer.
The EAT commented that despite the fact that cases can be envisaged where pay protection may be a reasonable adjustment as part of a package to get an employee back to work or to keep them in work, it will not be an everyday event for an employer to provide long-term pay protection. Much will depend on the facts of the case, for example if the need for a job was to disappear or the economic circumstances of the business changed then pay protection may cease to be ‘reasonable’.
An interesting point which comes out of this decision is that it will not be a good defence to say that a failure to provide pay protection was due to the likely discontent of the disabled employee’s colleagues. The Company used this as an argument reason in their case and it was considered by the EAT to be ‘unattractive’.
If you would like advice regarding these issues, please call 0800 024 1976 or contact us via our online form to speak to a member of our employment law team.