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3 November 2016

Pay protection and reasonable adjustments

In G4S and Powell, the EAT considered the extent to which an employer has a duty to protect pay as part of an array of reasonable adjustments for employees considered disabled under the Equality Act 2010.

The Facts

Mr Powell worked for G4S as an ATM maintenance engineer. He began his employment in 1997 and by mid-2012 he was suffering with back pain such that he was no longer fit for work involving heavy lifting or working in confined spaces – both requirements of his role. He was classified as disabled for the purposes of the Equality Act 2010 and G4S had an obligation to implement reasonable adjustments. At the same time, G4S created a new role of ‘key runner’ to travel around London and deliver parts and tools to ATM engineers as appropriate. The ‘key runner’ pay was 10% less than Mr Powell’s previous ATM maintenance engineer role. After a period of absence from work, Mr Powell returned to the ‘key runner’ role – not at the reduced rate of pay but at his higher rate. He understood that this protected pay to be on a long term basis.

In 2013 G4S proposed to reduce Mr Powell’s rate of pay to the usual level for a ‘Key runner’. Their view that Mr Powell’s placement was temporary and that the pay protection was not permanent. Mr Powell refused to accept the reduced rate of pay and was consequently dismissed.

Mr Powell claimed, among other things, that he was entitled to his full rate of pay regardless of the role as this would constitute a reasonable adjustment.

The ET

The ET found that pay protection, as part of a range of measure put in place for an employee, can be considered a reasonable adjustment. Mr Powell’s claim for failure to make reasonable adjustments was upheld.

Interestingly, the ET found that there need not be consent from both parties for a reasonable adjustment to be valid. This is different to a change of terms and conditions which would require an amendment to the contract.

G4S appealed to the EAT on the basis that pay protection for anything longer than short term was not reasonable.

The EAT

The EAT upheld the tribunal’s decision. In doing so, it stated that ‘significant’ pay protection in the ‘long term’ would not be an ‘everyday event’ and stressed the importance that this will only be one of a range of reasonable adjustments to encourage either a return to work or keeping an employee in work. In particular, each case is fact specific and will turn on its own facts.

Comment

The case creates difficulties when considering reasonable adjustments as the words above quoted from the EAT are cause for consideration. What will constitute ‘significant’ so far as the pay protection is concerned? How long is ‘long term’? It is clear that these considerations will turn on the individual facts of every case.

What is clear is that alternative roles must be considered, as has always been the case, and this case makes it clear that one such adjustment may be that pay may need to be protected for the short term at the very least. Businesses in the scenario of this case need to strike a balance between what is fair to the employee and the business when deciding the length for which an employee’s pay is protected.

http://www.bailii.org/uk/cases/UKEAT/2016/0243_15_2608.html

 

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