Is it a reasonable adjustment to protect a disabled employee’s pay?
It can be, depending on the particular facts and circumstances. In the recent case of G4S Cash Solutions v Powell the employer was required to continue the disabled employee’s existing rate of pay on an indefinite basis after he was moved to a more junior role.
Mr Powell worked for G4S Cash Solutions as an engineer. After a back injury prevented him from doing heavy lifting he was moved to the lower graded role of ‘key runner’, delivering materials to engineers based in different locations. Initially he retained his existing salary. However, after about a year, he was told that the change wasn’t permanent and that his salary was going to be reduced by 10%. Mr Powell was not prepared to accept a lower salary and was ultimately dismissed.
The Employment Appeal Tribunal decided that G4S had failed in its duty to make reasonable adjustments for Mr Powell. The higher rate of pay should have continued indefinitely. The EAT highlighted that:
- It will not be an ‘everyday event’ for an employer to have to provide long-term pay protection in these circumstances. However, sometimes it might be required as part of a package to get an employee to remain in or return to work.
- Whether pay protection is a reasonable adjustment will very much depend on the particular facts and circumstances including the cost of making the adjustment; the financial and other resources of the employer; and the effectiveness of the higher pay in retaining the employee or getting them back to work.
- It was relevant that G4S had already protected Mr Powell’s salary for a significant period and led him to believe that it was a permanent arrangement.
- The fact that the additional 10% salary cost was affordable for G4S, being a company with significant resources, was taken into account.
- The potential impact on others of an adjustment is not generally relevant when deciding on its reasonableness. G4S stated that they did not continue to pay the engineer rate because of the likely discontent from other employees but this was rejected as an ‘unattractive reason’.
- Where a reasonable adjustment involves a contractual variation (e.g. to hours or pay), it cannot be imposed without the employee’s consent.
The G4S decision was very much decided on its particular facts. It does not mean that employers moving a disabled employee into a lower paid role as a reasonable adjustment always have to protect their pay. However, going forward employees may well be encouraged to argue that their pay should be protected. Think about what would be reasonable in each case, considering:
- the cost of maintaining pay;
- the financial circumstances of the business;
- whether the adjustment to duties is permanent;
- the effectiveness of the higher pay in retaining the employee or getting them back to work; and
- the possibility that circumstances may change (when the position could be reviewed).
Document the decision making process and ensure that the employee is clear about what is happening to their salary and whether the arrangement is permanent or temporary.
The EAT’s decision way well be appealed. In the meantime, please get in touch with your usual Brodies contact to discuss your options if this is an issue you are dealing with just now.
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