The recent EAT decision in G4S Cash Solutions (UK) Limited v Powell may cause concern for employers, as it confirms that pay protection for a disabled employee moved to a lower paid role on account of a disability can constitute a reasonable adjustment.
The case involved Mr Powell (P) who had been employed by G4S for many years in a variety of different roles. In mid-2012 P was working as a Single Line Maintenance (SLM) engineer when it became clear, as a consequence of problems with his lower back, that he could no longer undertake material aspects of that role (heaving lifting and working in confined spaces). It was not in dispute that as of that time P was disabled for the purposes of the Equality Act 2010.
Later in 2012 G4S introduced the role of “key runner”, which was essentially a driver role with no engineering functions. P was moved to the key runner role in late 2012 following a period of sickness absence but continued to receive the higher SLM engineer salary. In 2013 G4S considered, for operational reasons, removing the key runner role and P was given a list of alternative posts and advised if none were suitable he would be dismissed on medical grounds. P took legal advice and complained that G4S was attempting to change an agreed variation to his Ts and Cs, namely his entitlement to work in the key runner role at the SLM engineer pay level.
G4S ultimately retained the key runner role and advised P he would be paid at the key runner pay level (approximately 10% lower remuneration). P was unwilling to accept this and was subsequently dismissed. P brought claims for unfair dismissal and disability discrimination in the ET.
The ET found that there had not been, as P contended, a variation to his Ts and Cs when he took on the key runner role, to the effect that he had a contractual entitlement to do this role with the higher SLM engineer salary on a permanent basis. However, the ET determined that G4S was obliged, as a reasonable adjustment, to employ Mr Powell in the key runner role on his previous SLM engineer pay. Both parties appealed to the EAT.
The EAT held that the ET had erred in law in determining that there was no contractual variation. Specifically, by determining that an employer seeking to comply with its duty to make reasonable adjustments can impose a particular adjustment on an employee without consent in circumstances where the adjustment is incompatible with the contract terms.
The EAT found that in such circumstances an employee would have to agree and thereby vary the contact terms. The EAT held that there had been a variation to P’s contract when he took on the key runner role albeit that the extent of the variation was not clear.
The EAT also found that pay protection for P was a reasonable adjustment. In reaching that decision the EAT gave recognition to the fact that this was an isolated case, which had limited financial and policy implications for G4S. It is of note that before the courts G4S did not contend that it could not afford to sustain P’s pay protection rather the basis for its position was a concern that
there would be discontent amongst employees if they found out about P’s preferential salary. There was, however, no evidence put forward to support this concern.
Implications for Employers
Whilst this case may give initial cause for concern to employers it is important to bear in mind (and the EAT took care to explain) that it would not be an everyday event for an employer to provide permanent pay protection – each case will turn on its own particular facts. Pay protection will not therefore be reasonable in every case.
In assessing reasonableness cost may be a relevant factor for an employer. However, that will need to be supported by tangible evidence of limited resources and/or significant cost, policy or other repercussions.
Employers must therefore take care and properly analyse all of the relevant circumstances before determining that to offer or maintain pay protection is not a reasonable adjustment. If in doubt take advice.
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