Pay protection could be a reasonable adjustment in certain circumstances


The Employment Appeal Tribunal (EAT) has ruled that pay protection could be counted as a reasonable adjustment in certain circumstances.

In the case of G4S Cash Solutions vs Powellengineer Powell developed a back condition that required him to perform lighter duties. Integrated cash management organisation G4S Cash Solutions accommodated this by assigning him to a new role as a key runner. Although the key runner role had a lower rate of pay, Powell’s original salary was maintained.

When G4S Cash Solutions looked to discontinue the key runner role for organisational reasons, Powell raised a grievance and the organisation agreed to make the job permanent but at the lower rate of pay typical of the key runner role. Powell disputed this, and when an impasse was reached, Powell was dismissed.

Powell bought the case to the Employment Tribunal (ET) that found that the organisation had failed to make reasonable adjustments by not permitting Powell to continue in the role at his original rate of pay.

On appeal, the EAT upheld that pay protection could be considered a reasonable adjustment. The EAT argued that reasonable adjustments for a disabled employee in the workplace will involve a cost, such as paying for support or assistance, so there is no reason in principle why pay protection could not be included as part of a package of reasonable adjustments.

G4S Cash Solutions had given the likelihood of discontent from other employees as the key reason for not paying Powell his original rate of pay, a reason that was rejected by the ET. The EAT found that the ET was entitled to reject this.

The EAT decision noted that long-term pay protection may not be considered a reasonable adjustment in every case, and that pay protection may cease to be deemed a reasonable adjustment in light of changed circumstances, such as a change in an organisation’s economic circumstances.

Simon Rice-Birchall, partner at law firm Eversheds, said: “If you were to ask me before this case, ‘would I think that reasonable adjustments would amount to extending pay to somebody to do a job that isn’t worthy of that rate of pay?’, I would have said ‘no, it doesn’t’. Now I would have to take a deep breath and hesitate.”

Elizabeth Slattery, partner at Hogan Lovells, added: “The starting point is that employers are going to have to consider whether or not pay protection would be a reasonable adjustment in the individual circumstances. They will need to consider that relative to cost, particularly for larger employers, when the resources appear to be more significant.”