Contributors
In G4S Cash Solutions (UK) Ltd v Powell (UKEAT/0243/15), the EAT held that it was a reasonable adjustment to allow a disabled employee to continue to receive his existing rate of pay when he became unable to carry out his role and moved to a more junior position.
Facts
Mr Powell started working for G4S Cash Solutions (UK) Ltd (G4S) in 1997. In 2012, he was no longer able to carry out his role as an engineer maintaining the company's ATM cash machines due to problems with his back and the requirements of his role.
Mr Powell had carried out a variety of roles for G4S during his employment. In 2012, G4S created a new role of "key runner" to support the ATM engineers. Mr Powell started working as a key runner while retaining his original salary as an engineer, and thought that this change was long-term.
In 2013, G4S considered discontinuing the key runner role for organisational reasons. Mr Powell was then told that the change to his role had not been permanent. He was told that G4S would consider alternative vacancies and, if there was no suitable role available for him, he would be dismissed on medical grounds.
Mr Powell raised a grievance, and argued that G4S was attempting to change his terms and conditions. G4S then decided to make his role as a key runner permanent. As the role did not require the skills of the ATM engineer, the role was offered at a lower rate of pay. Mr Powell was not prepared to accept the 10% reduction in pay and was dismissed in October 2013.
Employment tribunal decision
Mr Powell claimed that there had been an agreed variation to his contract of employment and that his line manager had confirmed the permanent nature of the assignment to the key runner role. G4S argued that Mr Powell was not offered permanent reassignment.
The Employment Tribunal did not accept that there was an agreed variation. It found that a reasonable adjustment could be effective without the employee's consent. The Tribunal also held that it was a reasonable adjustment for G4S to employ Mr Powell as a key runner at his original rate of pay and that the dismissal amounted to discrimination arising from disability and was unfair.
G4S appealed the reasonable adjustment decision and Mr Powell cross-appealed the decision that there was no contractual variation.
Employment appeal tribunal decision
The EAT dismissed G4S's appeal and upheld the finding that G4S should have continued to pay Mr Powell the higher salary as a reasonable adjustment.
In its conclusions, the EAT referred to the case of Archibald v Fife Council [2004] ICR 954 which confirms that the duty to make reasonable adjustments may require the employer to treat an employee more favourably than others and that this duty may require an employer to transfer an employee to a different role.
It was noted that protecting an employee's pay in these circumstances is no more of a cost to an employer than any other form of cost. For example, there may be a choice between keeping the employee in an existing role, paying for support and assistance, or transferring to a new role where there is no support or assistance but the pay is lower. In that situation, it may be reasonable to protect the employee's pay.
The EAT concluded that it will not be an "everyday event" for an employer to provide pay protection but there may be situations where it will be a reasonable adjustment to enable an employee to return to work or remain in work. The financial impact will always have to be considered. In the case of G4S, it had substantial resources and the additional cost of employing Mr Powell was affordable.
In terms of Mr Powell's cross appeal, the EAT also found that the Tribunal had made an error of law in finding that there was no agreed contractual variation. The EAT took the view that, if an employer proposes an adjustment which is incompatible with the terms of the contract, the employee can decline it and the adjustment cannot be effective without agreement. The EAT found that the Tribunal had not made clear findings as to the parties' intentions on the issue of whether the assignment to the key runner role was permanent.
As the appeal was dismissed, the EAT decided that there was no practical point in remitting the contractual variation issue to the Tribunal.
Comment
Until now, employers have been confident that they are able to make reasonable adjustments and redeploy an employee at a reduced rate of pay. This case is a striking example of the significant scope of the duty to make reasonable adjustments and provides the opportunity for employees to argue that their higher rate of pay should be maintained.
In considering whether an adjustment is reasonable, an employer will need take into account various factors including the cost of maintaining pay, whether it is likely to be a long-term change and the financial circumstances of the business and resources available to the employer.
Each case will turn on its own facts. This case shows that it is possible for pay to be protected but it does not mean that it will be reasonable in every case. As the EAT stated in this case, it will not be an "everyday event" to protect an employee's pay on a long term basis. The EAT also made it clear that an adjustment may cease to be reasonable, for example, if the employer's economic circumstances changed.
An interesting point which comes out of this decision is that it will not be a good defence to say that a failure to provide pay protection was due to the likely discontent of the disabled employee's colleagues. G4S used this as an argument reason in their case and it was considered by the EAT to be "unattractive".
