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Land Registry v Houghton and others – is it discriminatory to withhold bonuses from employees with a poor absence record?
Potentially yes, when their absence is a result of their disability.
The Land Registry operated a discretionary bonus system for their employees. One of the terms of the bonus was that employees who had received a final warning in respect of their poor absence record, during the relevant financial year, would not be eligible for the bonus. Managers were able to disregard final warnings for instances of conduct, but this discretion was not available for absence.
The five Claimants in this case were all disabled within the definition provided by the Equality Act 2010 (“EA 2010”).
The Claimants presented a claim to the Employment Tribunal on the basis that they were discriminated against due to their disability, under s15 of the EA 2010.
The ET upheld the claims on the basis that there was a causal link between the loss of bonus and the Claimants’ disabilities. The formal warning resulted from absence relating to a disability, and the warning automatically resulted in the Claimants not being entitled to a bonus. The ET was also satisfied that the scheme could not be objectively justified. The Land Registry appealed to the EAT.
The EAT agreed with the ET entirely.
What this means for employers is that it is important to ensure that there is flexibility within your policies, such as sickness absence, maternity and bonus schemes, to ensure that it is not discriminatory or unfavourable to employees.
Our employment team is more than happy to review any policies which you may have, or provide you with one for a fixed fee. Please feel free to get in touch with us today.