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Reasonable adjustments: Where an employee is placed in a lesser role as a reasonable adjustment, is the employer required to maintain their existing higher pay?

31 Aug 2016

Potentially yes, said the EAT in G4S Cash Solutions (UK) Ltd v Powell in a decision that goes against the trend of cases relating to reasonable adjustments.

Increasingly over the last decade the courts have taken the approach that the duty to make reasonable adjustments in respect of a disabled employee should focus on the practical steps that an employer could reasonably take to help keep a disabled  employee at the workplace, such as providing equipment or support or changing duties. The tendency has been against requiring an employer to make significant adjustment to financial arrangements.

The most obvious example of this is Meikle v Nottinghamshire County Council (2005) where the Court of Appeal supported the view of the Employment Appeal Tribunal that the payment of enhanced sick pay to a disabled employee who was absent sick was in principle capable of falling within the duty to make adjustments, but that it would be a rare and exceptional case.

In Mr Powell’s case, he was employed to work as an engineer on cash machines. He had a back condition which was accepted to be a disability. In 2012, following a period of absence, Mr Powell went back to work in a support role to the engineers which was known as key runner. He was allowed to retain his higher engineer’s rate of pay.

After 12 months G4S wanted to reduce Mr Powell’s salary to the appropriate rate for the key runner job. Mr Powell refused to accept the reduction and was dismissed.

Mr Powell succeeded in his claim that G4S had failed to make a reasonable adjustment in that they should have allowed him to work in the key runner role whilst  maintaining him at the higher engineer’s rate of pay.

The Employment Appeal Tribunal rejected G4S’s appeal and concluded that there was no reason why protecting pay in this way should not potentially be a reasonable adjustment. It recognised that additional cost to an employer will often be a feature of the adjustment that at employer will be required to make in respect of a disabled employee and that the duty may involve treating a disabled employee more favourably than colleagues. It emphasised that the question, in every case, would be what is reasonable.

So, where does this leave employers?

Changing a disabled employee’s duties will often be a sensible and reasonable adjustment for an employer to make in respect of a disabled  employee. Generally an employer has been able to approach the matter on the basis that the employee will be paid the going rate for the revised role, which may involve a reduction. Mr Powell’s case will encourage employees to argue that their existing higher pay should be maintained. In that situation an employer will have to address its mind to what is reasonable. In doing so it should have regard to:

  • the cost of maintaining pay;
  • the financial circumstances of the business;
  • the financial circumstances of the employee;
  • whether the adjustment to duties is permanent; and
  • the possibility that circumstances, including the need for the adjustment or the financial circumstances, may change at which point the position can be reviewed.

It should be noted that the discontent of colleagues will not be a good reason for not making the adjustment.

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