Pay Protection May be a Reasonable Adjustment For Disabled Staff
Pay Protection May be a Reasonable Adjustment For Disabled Staff
The Employment Appeal Tribunal (EAT) has ruled that an employer was obliged to continue paying a disabled employee his full salary even though he had been redeployed into a less well-paid role because he could no longer carry out his normal duties as a result of disability.
In the case of G4S Cash Solutions UK v Powell, Powell worked as an engineer for the integrated cash management firm, maintaining ATM machines until a lower back condition prevented him from carrying out tasks that involved heavy lifting or work in confined spaces.
Powell was given a newly-created role, a “key runner”, which involved driving a vehicle to deliver parts to engineers, and for which his employer continued to pay him his original engineer’s salary, which was around 10% higher than the pay for a key runner role. He understood this to be a long-term arrangement, though G4S disputed that there was a variation of his contract of employment.
Refusal of pay cut leads to dismissal
In the following year, G4S considered the discontinuation of the key runner role for organisational reasons, and informed Powell that the role was not permanent. When Powell raised a grievance, the organisation offered to make the job permanent, on the condition that he would have to take a cut in pay to the standard rate of remuneration for a key runner, because the key runner role did not require his engineering skills. Powell did not wish to accept the 10% reduction in pay, and he was dismissed.
Powell brought a claim of unfair dismissal and disability discrimination against the organisation at the Employment Tribunal, claiming that he and G4S had agreed to vary his contract to the effect that he could continue the key runner role on his original salary.
Appeal brings new judgement
The Employment Tribunal found that the contract had not been varied; however, it did find that the organisation had failed to make reasonable adjustments by not allowing Powell to work as a key runner on his engineer’s salary rate.
G4S appealed the Employment Tribunal’s ruling, and Powell cross-appealed the finding that his contract had not been varied.
The EAT disagreed with the Employment Tribunal’s decision, and found that there had been a valid variation of contract and upheld that pay protection could be considered a reasonable adjustment.
The EAT’s judgement states that a number of reasonable adjustments incur a cost for an organisation, such as training costs or additional support. Pay protection can be seen as another such cost, it said.
The judgement also notes that requiring an employer to include long-term pay protection as a reasonable adjustment is unlikely to apply in every case, and will depend on the facts of each case. It also states that changes in circumstances may mean that what is initially deemed a reasonable adjustment may not be so in the future.
What does this ruling mean for employers?
Employers must carefully assess their reasons for not protecting pay for disabled employees who are moving to new roles because of a disability. Cost may be considered a reason to argue that pay protection is not a reasonable adjustment, but this will be examined by a tribunal in the context of the employer’s resources and whether or not there might be broader impact on cost or policy.
In G4S Cash Solutions UK v Powell, the prime objection offered by the employer against remunerating Powell at the higher rate was that it would cause discontent amongst co-workers if they discovered Powell had received special treatment.
The Employment Tribunal did not concur with this line of argument, saying that G4S could have told disgruntled employees that it was complying with a legal obligation, and also that there was no evidence that anyone had complained during the period Powell had already performed the key runner role on the higher rate.
A lack of sympathy on the tribunal’s part in this respect indicates that employers must be prepared for their objections to an adjustment to be closely examined.
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