15th September 2016

Pay Protection After a Disability

cutting down wagesEmployers have a duty to make reasonable adjustments in the workplace where a disabled person would otherwise be put at a substantial disadvantage when compared with those who are not disabled. This could include pay protection.

The recent case of G4S Cash Solutions (UK) Ltd v Powell explored how far an employer might be expected to go when it comes to adjustments relating to pay.

The Employment Appeal Tribunal (EAT) held that, in the right circumstances, protecting a disabled employee’s pay could be a reasonable adjustment.

Case Facts

In this particular case, Mr Powell was employed as an engineer maintaining cash machines. After developing back problems, he could no longer carry out the heavy lifting and work in confined spaces required for that role. It was accepted that Mr Powell had a disability and in 2012, following a period of sickness absence, Mr Powell went back to work but was moved into a less skilled ‘key runner’ role delivering parts and keys to engineers. G4S continued to pay Mr Powell his engineer’s salary despite the change in role, but subsequently decided 12 months later that his salary should be reduced by around 10% when his role was made permanent. Mr Powell refused to accept the proposed pay cut, and was later dismissed.

Consequently, Mr Powell commenced proceedings against G4S and presented claims for unfair dismissal and disability discrimination.

The EAT found the dismissal to be discriminatory and unfair, and that the reasonable adjustments required extended to maintaining Mr Powell’s pay in his new role. G4S appealed against this decision.

It is clear that Mr Powell was unable to meet G4S’s requirement to carry out his duties as an engineer.  He was able to demonstrate that he was suffering a substantial disadvantage as compared to non-disabled employees because he was faced with the choice of either a pay cut or dismissal. Undoubtedly, G4S had a duty to make reasonable adjustments but the key question was, was it reasonable to expect them to protect his pay indefinitely.

The EAT rejected G4S’s appeal and found that there was no reason why protecting pay in this way should not potentially be a reasonable adjustment. Pay protection is no different to other costs incurred by an employer when making reasonable adjustments, such as training or support. Inevitably, employers will incur a degree of cost when making adjustments and the EAT held that pay protection is no different.

Comment on Pay Protection

This case is a striking example of the extensive scope of the duty to make reasonable adjustments and provides employees with considerable latitude to argue that their higher rate of pay despite being placed in a lesser role, should be maintained.

Whilst this may not be required in all cases, and the EAT made the point that whilst it will not be an “everyday event”, maintaining pay could well amount to a reasonable adjustment which employers may be expected to make as part and parcel of aiding an employee to get back to work, or keep them in work. It is certainly no longer safe to assume that just because an employee has been redeployed to a more junior role because of a disability, it is reasonable to reduce their pay as well.

Equally, it is important to ensure that where you are making reasonable adjustments to consider carefully whether it is appropriate to reduce a disabled employee’s pay in line with any changes made. In this case, the employer’s main argument that this would cause upset to other employees was not accepted. The EAT did say each case turns on its own facts and we suspect the Employer probably fell down in this case because they had allowed the employee to operate in the more junior role for 12 months at his usual pay rate which suggested the cost was not a major issue for their business.

If you do wish to reduce pay, you will need to be able to show that there is some justification as to why it would not be a reasonable adjustment in the circumstances of that particular case to maintain the higher level of pay.

*All information is correct at the time of publishing

Oliver McCann

Napthens LLP – Employment Law Specialist

A highly experienced employment lawyer, Partner Oliver McCann acts for employers across all industry sectors, from owner-managed business through to large PLCs, as well as education establishments and charities. He has particular experience in advising employers in domiciliary care, leisure, retail, security, manufacturing, marketing, and the IT sectors. Read more

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