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Posted 8 September 2016
by Stephen Jennings

Protecting a Disabled Employee’s Pay Can be a Reasonable Adjustment

In the recent case of G4S Cash Solutions (UK) Ltd v Powell, the Employment Appeal Tribunal (EAT) upheld the employment tribunal’s decision that an employer is required, as a reasonable adjustment, to continue employing a disabled employee in a more junior role at his existing rate of pay.

The Facts

Mr Powell was employed by G4S Cash Solutions (UK) Limited (G4S) as a single-line maintenance engineer and had worked for the company since 1997. His role was to maintain the company’s ATM machines. Mr Powell suffered from back pain and from 2012 onwards was no longer able to carry out jobs which involved heavy lifting or work in confined spaces. He was subsequently moved to a less skilled job as a key runner. After initially protecting Mr Powell’s pay, G4S proposed reducing his salary by around 10%. Mr Powell was unwilling to accept the reduction in pay and was dismissed.

The Law

Under the Equality Act 2010 (EqA), the employer has a duty to make reasonable adjustments where it knows (or ought reasonably to know) that a person has a disability, and there is a provision, criterion or practice which places that person at a substantial disadvantage. In this case it was accepted that Mr Powell was disabled from 2012 under the definition of disability in the EqA, and the issue for the Tribunal was whether an employer was required to maintain a disabled employee’s existing salary, as a reasonable adjustment, when transferring them to a new role.

The Employment Tribunal Decision

The tribunal found that the dismissal had been discriminatory and unfair, and that G4S was required, as a reasonable adjustment, to employ Mr Powell as a key runner on the same salary as under his previous role. G4S appealed the decision.

The Appeal Decision

The EAT dismissed the appeal and upheld the tribunal’s decision that G4S should have continued to pay Mr Powell at the higher rate of pay as a reasonable adjustment. It noted that the objectives of the legislation plainly envisage that there will be an element of cost to an employer when making reasonable adjustments, and that the issue of pay would be one form of cost.

What does this mean for employers?

The EAT made it clear in its decision that requiring employers to make up pay in these circumstances would not be an “everyday event”, and that each case should be considered on its own facts. The question will always be whether or not it was reasonable for an employer to make the specific adjustment to counter a disabled employee’s disadvantage. In practice, an employer will need to consider each case individually and decide whether it is reasonable, in all the circumstances, to maintain a disabled person’s salary where they have been moved to a less skilled role as a result of their disability. Factors to consider might include the cost to the employer and the financial resources available. In the G4S case, Mr Powell was paid at the higher rate of pay for around 12 months and G4S had led him to believe that this would be a long-term arrangement. G4S’ main argument for reducing Mr Powell’s pay was that maintaining his higher salary might cause resentment from other employees rather than, for example, a genuine concern about the cost to the company. The EAT described G4S’ argument as an “unreasonable reason” and did not consider that this was a factor which should be considered when determining whether an adjustment was reasonable. Until there is further case law in this area, there is uncertainty as to the extent to which this decision should be applied where a disabled person is moved to a lower paid role. We will keep you updated with any further case law developments.


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About the author

Stephen Jennings

Partner and Solicitor

Partner in the litigation department specialising in employment law, he is the relationship manager for many of the firm's employment clients