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  • Published:
    06 September
  • Area of Law:

Maintaining pay, a reasonable adjustment?

Employers have a legal obligation to make reasonable adjustments in order to keep disabled employees at work. In the recent case of G4S Cash Solutions (UK) Ltd v Powell, the Employment Appeal Tribunal (EAT) held that a reasonable adjustment could include maintaining the previously paid higher rate of pay even though an employee had been moved to a lesser, lower paid role on a long term basis in order to keep him at work.

The case

Due to a significant back problem, the employee had been moved from a physically demanding engineering role maintaining cash machines to a less skilled and less physically demanding 'key runner' role. His pay was maintained for an initial period of time. However, the following year the employer said that the role was not a permanent change and it was only prepared to employ him in this role at a reduced rate of pay. The employee refused to accept these changes and was dismissed.

Crucial in the EAT’s finding that the employer had failed in its duty to make reasonable adjustment was that in so far as the ring-fenced pay involved an element of positive discrimination, it was reasonable for the employer to ring fence pay in the interests of securing continued employment.

The main objection put forward by the employer was that it would cause discontent amongst other employees if they came to know that the employee had been given special treatment. This was rejected by the EAT as nobody had previously complained. It was also highly relevant that the employer had a ‘free hand’ in determining what the pay should be. Ring-fencing pay was held to be a relatively small cost for the employer in the long term.

What does it mean for you?

The case highlights the extent to which employers are required to consider a range of adjustments to keep disabled staff at work. Each case will depend on its own facts and what is deemed to be “reasonable” for a particular employer in the light of its size and resources. However, businesses should be aware that it might be a reasonable adjustment to maintain a previously enjoyed higher rate of pay if an employee is moved to a more junior role, rather than simply considering obvious less expensive adjustments such as altering duties, hours, retraining etc.

For more information on the issues raised above or any other employment related matter, please contact a member of the Employment Team.

"This is exactly why we like to work with people who understand the industry and can identify potential issues and create solutions."

Jon Saltinstall, Senior HealthCare Banking Consultant, Lloyds Bank