Pay protection for disabled employees may constitute a reasonable adjustment

The Employment Appeal Tribunal has ruled that the obligation on an employer to consider making reasonable adjustments to help disabled employees overcome any disadvantage caused by disability may extend to paying them a higher rate of pay than the “going rate” for the work that they are able to do.

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In the case of G4S Cash Solutions (UK) Limited v Mr A Powell, the parties agreed that Mr Powell was disabled within the terms of the Equality Act 2010 and that his disability (a back condition) prevented him from continuing in his present role.  The employer moved Mr Powell into a less skilled role but continued paying him at the rate applicable to his old role.  A year or so later the employer told Mr Powell that he would have to accept a reduction in pay, to the rate applicable for the new role, or be dismissed.  Mr Powell refused to accept the pay reduction and was dismissed.
The Employment Tribunal found that the disadvantage suffered by Mr Powell compared to non-disabled colleagues was that he was unable to continue in his original role and therefore he faced either dismissal on capability grounds or a reduction in pay.  The Employer was under a duty to consider making reasonable adjustments to alleviate this disadvantage and the Tribunal found that it was reasonable on the facts for the employer to move Mr Powell into a role he was capable of doing but which had less responsibilities, whilst maintaining his former rate of pay on an indefinite basis.
The Employment Appeal Tribunal (“EAT”) agreed.  The obligation to make reasonable adjustments anticipates that this may involve some cost to the employer and there was nothing in the relevant provisions of the Equality Act that could be read as excluding a requirement to protect an employee’s pay from the obligation to make reasonable adjustments. However, the question will always be whether or not it is reasonable for the employer to take that step.
In the present case the cost of protecting Mr Powell’s pay was about £3,484 per annum, which the Employment Tribunal calculated gave rise to a  projected total cost if Mr Powell continued in work for another 15 years (when he might reasonably be expected to retire) of £37,260.  The Tribunal found that G4S is a company with “very substantial resources” and that the additional annual cost was “easily affordable”.  The EAT agreed, but made it clear that the decision was very specific to the facts of the case and it was not likely to be an “everyday event” for employers to be required to make up an employee’s pay long term to any significant extent.
To date there has been a widely-held assumption that, whilst moving a disabled  employee to a new role might be a “reasonable adjustment.”, the employer was only required to pay the going rate for that role.  Despite the EAT’s emphasis on the limits of when it is likely to be “reasonable” for an employer to protect a disabled employee’s pay, this case is likely to be much-cited by disabled employees and their advisers and difficult arguments about where the line is drawn on what level of pay support might be “reasonable”.

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