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Pay protection as a reasonable adjustment?

The Employment Appeal Tribunal in the case of G4S Cash Solutions (UK) Ltd v Powell has held that it can be a reasonable adjustment to maintain a disabled employee’s former salary even if they are carrying out a lesser role.

Background

The Claimant had been employed by G4S as an engineer for many years. However, after developing back pain, the Claimant was no longer fit to perform the engineer role and was deemed disabled under the Equality Act 2010 (“EqA 2010”).

Under the EqA 2010, an employer has a duty to make reasonable adjustments where it knows (or ought reasonably to know) that a person has a disability and that they may be placed at a substantial disadvantage in comparison with employees who are not disabled, by:

  • A provision, criterion or practice (“PCP”) of an employer
  • A physical feature of an employer’s premises
  • A failure by an employer to provide auxiliary aid

As a result of his disability G4S transferred the Claimant to a new “key runner” role which was a more junior, less demanding position that involved driving and delivering. The Claimant initially retained the salary that he had received while working as an engineer.

Some time later, G4S decided to make the role permanent but with a 10% decrease in the salary. The Claimant argued that he had been led to believe that the position had been permanent from the outset. The Claimant was subsequently dismissed when he refused to accept the 10% reduction in pay.

The Claimant brought claims to the Employment Tribunal for unfair dismissal and disability discrimination, arguing that there had been an agreed variation to his contract when he started the “key runner” role.

Decision

The Employment Tribunal rejected the Claimant’s claim that there had been an agreed variation to his contract but held that G4S was required to continue to employ the Claimant at his original rate of pay as a reasonable adjustment. Both parties appealed elements of the decision.

The view of the Employment Appeal Tribunal was that there had been a variation to the Claimant’s contract although the terms of the variation remained unclear (i.e. whether it was permanent or temporary). In its view, if an employer proposes an adjustment which is incompatible with the terms of the contract (e.g. a reduction in pay or a change in duties), the employee is entitled to refuse it and therefore the adjustment would not be effective without consent.

The EAT agreed that G4S was required to maintain the Claimant’s original salary in his new role as a reasonable adjustment. It found that there was no reason why the protection of pay could not be a reasonable adjustment and that pay protection is no different to other costs incurred by an employer when making reasonable adjustments.

Comment

It is important for employers to note that claims for disability discrimination can be brought for failure to protect employees pay if they are re-deployed as a reasonable adjustment. However, each case will always depend on its own facts and the Tribunal will look at whether an adjustment is reasonable in the given circumstances. Employers should make clear to disabled employees the terms of any adjustment at the outset and it would be advisable to obtain express agreement to any variation in the contract.

If you would like to speak to us about disability discrimination or reasonable adjustments, please feel free to email us  or contact us on 0191 282 2880 for a no obligation chat.

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