UK: Is Permanent Pay Protection A Reasonable Adjustment?

EAT decision adds to established principles on the reasonableness of paying for a role no longer being performed.

The duty to make reasonable adjustments is unique to the protected characteristic of disability and, where it applies, an employer must treat the disabled person more favourably than others in an effort to reduce or remove the disadvantage faced by that individual.

The duty to make adjustments can arise if an employer knows, or ought reasonably to know, of an employee's disability and that person is placed at a substantial disadvantage by an employer's provision, criterion or practice, a physical feature of the employer's premises or where it caused by an employer's failure to provide an aid.

What is a 'reasonable' adjustment will depend on the individual circumstances, but broadly the factors considered are the extent to which the adjustment reduces the disadvantage, how practicable the adjustment is, what the costs, financial or otherwise, of the adjustment are and what resources the employer has to implement them. This principle is applied to practically all working arrangements, and case law has considered the extent of the duty in the context of pay.

In Nottinghamshire County Council v Meikle [2004] a disabled employee was absent from work due to the employer's failure to make reasonable adjustments. The employer failed to extend the employee's sick pay provision when this was exhausted, which the Court of Appeal held was a reasonable adjustment that the employer failed to carry out.

The Miekle case is contrasted by O'Hanlon v Commissioners for HM Revenue & Customs [2007]. A disabled employee exhausted their sick pay entitlement and claimed they had been put at a disadvantage by the employer's sick pay rules, as sick pay was not extended to accommodate them. In this case, the Court of Appeal upheld the EAT's decision that it would be rare for it to be a reasonable adjustment to give more generous sick pay entitlements to disabled employees in comparison to employees who were not disabled, commenting that the duty to make reasonable adjustments is not to treat disabled employees as 'objects of charity' – particularly where this may act as a disincentive to returning to work. The distinction from Meikle was that the extended period of sick leave in that case was due to the employer's failure to make the reasonable adjustments required, and so the duty to extend sick pay provisions itself became a reasonable adjustment.

O'Hanlon was followed by G4S Cash Solutions (UK) ltd v Powell [2015], in which the EAT upheld a tribunal's decision that he employer should have protected the pay of a disabled employee assigned to a less skilled role. A distinguishing factor in this decision was that the employer had not made clear that the employee's pay would reduce as a result of the change in role.

A recent EAT decision considered whether an employer should maintain a disabled teacher's pay when she switched to a lower-paid role.

Case: Aleem v E-Act Academy Trust Limited [2021]

Ms Aleem became unable to teach due to a mental ill health condition qualifying as a disability under the Equality Act 2010. She was moved to the position of cover supervisor, resulting in a decrease in her salary, with her higher teacher's salary protected for three months. The tribunal found that the Academy made clear, repeatedly, that the pay protection was a temporary measure that would only last for the probation period of the new supervisor role.

When Ms Aleem's pay subsequently reduced she brought a claim for failure to make reasonable adjustments, essentially arguing the Academy should have continued to pay her at her higher teacher's pay level. Her claims were dismissed by the tribunal.

On appeal, the EAT upheld the tribunal's decision, noting that the Academy had paid the higher rate of pay for a limited time for clear reasons and the Academy had clearly explained to Ms Aleem that this was a temporary adjustment. This was very different to Ms Aleem's expectations that higher pay should be permanent and that it would not be reasonable for the Academy to continue to pay the higher rate.

Comment

The decision in this case followed the precedent set in O'Hanlon that it is rarely reasonable to expect an employer to maintain pay levels for disabled employees who no longer perform the role that the pay level relates to. However, it is worth noting that this decision was arrived at by clearly distinguishing the facts in Miekle, O'Hanlon and Powell, as noted above.

It is clear in this case that the Academy was assisted by ensuring it was clear with Ms Aleem about the temporary nature of the higher pay level to cover a probationary period and in all other accounts it appears the Academy did what it could to make adjustments to accommodate Ms Aleem as an employee.

Whilst the decision will no doubt be welcomed by employers, it does not mean that all employers faced with the same situation would see the same result at tribunal. Reasonable adjustments claims continue to be heavily fact-dependent and a large employer with considerable resources may be expected to further than the Academy was in this case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.