The Employment Appeal Tribunal (EAT) has ruled that pay protection can be included as a reasonable adjustment for disabled employees.
In the case of G4S Cash Solutions UK v Powell, Powell worked as an engineer for the integrated cash management organisation, maintaining ATM machines across central London until a lower back condition prevented him from carrying out tasks that involved heavy lifting or work in confined spaces.
Following a period of absence, Powell was assigned a key runner role at the organisation, which involved driving a van to deliver parts to engineers working in London.
Mr Powell was led to believe that this adjustment was a long-term arrangement and would be maintained at his current rate of pay, which was around 10% higher than pay for a key runner role.
In May 2013, G4S Cash Solutions considered discontinuing the key runner role for organisational reasons, and informed Powell that the role was not permanent. When Powell raised a grievance, the organisation offered to make the job permanent, however he would have to take a pay cut to the standard rate of pay for a key runner. Powell refused and was dismissed in October 2013.
Powell brought a claim of unfair dismissal and disability discrimination against the organisation at the Employment Tribunal (ET), arguing that his contract had been varied when he began the key runner role entitling him to continue this role on his original salary.
The ET found that the contract had not been varied. However, it did find that the organisation had failed to make reasonable adjustments by not allowing Powell to work as a key runner on his engineer salary rate.
G4S Cash Solutions appealed the ET’s decision, and Powell cross-appealed the finding that his contract had not been varied.
The EAT found that there had been a valid variation of contract and upheld that pay protection could be considered a reasonable adjustment.
The judgement states that many reasonable adjustments involve a cost to the organisation, such as training costs or additional support. Pay protection can be seen as another such cost.
The judgement notes that requiring an employer to include long-term pay protection as a reasonable adjustment is unlikely to apply in every case, and will depend on the facts of each case. It also states that changes in circumstances may mean that what is initially deemed a reasonable adjustment may cease to be so in the future.
Alex Payton, employment law expert at Howes Percival, said: “While this case states that pay protection for a disabled employee can amount to a reasonable adjustment, this will not always be the case.
“In this case, the employer had continued the arrangement for approximately a year and had led the employee to expect the change to be long term. The main reason advanced for not paying the employee at the higher rate was said to be the likelihood of discontent from other employees. This was considered to be an unattractive reason.”