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Reasonable adjustments and pay protection

What amounts to a 'reasonable adjustment' for a disabled person at work has been fertile ground for litigation over recent years and the latest decision of the Employment Appeal Tribunal (EAT) has potentially created even greater uncertainty, in particular in respect of whether or not an employee's pay should be protected where, for example, they have been offered a lower paid role by way of a reasonable adjustment.

What amounts to a 'reasonable adjustment' for a disabled person at work has been fertile ground for litigation over recent years and the latest decision of the Employment Appeal Tribunal (EAT) has potentially created even greater uncertainty, in particular in respect of whether or not an employee's pay should be protected where, for example, they have been offered a lower paid role by way of a reasonable adjustment.

In G4S Cash Solutions (UK) Ltd v Powell, the EAT was asked whether a reasonable adjustment which is incompatible with the terms of an employment contract can be imposed by an employer or is an employee's consent required. The EAT was also asked if there was any reason in principle why pay protection, in conjunction with other measures, could not be a reasonable adjustment.

Mr Powell (P) worked for G4S Cash Solutions (UK) Ltd (G4S) as an engineer responsible for maintaining automatic teller machines (ATMs) in central London. Over the years, he developed back problems and, by mid-2012, he was not fit for jobs involving heavy lifting or working in confined spaces. On his return to work following a period of sickness absence in 2012, P began working in a newly created role of 'key runner', which involved driving from G4S's depot to deliver parts and keys to its ATM engineers, so enabling them to travel between jobs by public transport. G4S continued to pay P his original engineer's salary for the key runner role and P understood this to be a long term arrangement.

In May 2013, G4S was considering discontinuing the key runner role for operational reasons. It told P that the role was not permanent and gave him a list of alternative vacancies to consider, stating that if nothing was suitable then he could be dismissed on medical grounds. P presented a grievance, arguing that G4S was attempting to change his terms and conditions. G4S then decided to make the key runner role permanent, but at a lower rate of pay to reflect the fact that it did not require engineering skills. P was unwilling to accept the 10% pay reduction this would entail and was dismissed on 8 October 2013.

An employment tribunal rejected P's claim that there had been an agreed variation to his contract of employment when he commenced in the key runner role, such that he was entitled to continue in that role at his original salary on a permanent basis. However, the tribunal went on to hold that G4S was required, as a reasonable adjustment under section 20 of the Equality Act 2010, to employ P as a key runner at his original rate of pay. G4S appealed against this finding and P cross-appealed on the finding that there had been no variation of his contract of employment relating to his job content and terms.

On the contract variation point the EAT held that the tribunal had based its view that there was no contractual variation on the incorrect assumption that an employer seeking to fulfil its statutory duty to make a reasonable adjustment was entitled to insist on a particular adjustment without the employee's consent. In the EAT's view, if an employer proposes an adjustment which is incompatible with the terms of the employment contract, the employee is entitled to reject the proposed adjustment. So any variation proposed by an employer needs to be agreed with the employee if it is incompatible with the contract of employment. In the case of P it was the EAT's view there was clearly a variation of his contract in summer 2012, but the scope of the terms of the variation as to duration for example, were unclear, and the tribunal had not made any findings on the point. Normally the EAT would send the case back to the employment tribunal to consider and rule on these points, but did not do so because of its other findings in the case.

The EAT held that the tribunal had been entitled to conclude that G4S was required, as a reasonable adjustment, to employ P as a key runner at his original salary. In the EAT's view there was no reason in principle why the duty to make reasonable adjustments should be read as excluding any requirement to protect an employee's pay in conjunction with other measures to counter the employee's disadvantage through disability. The question will always be whether it is reasonable for the employer to have to take that step in the circumstances of each case. It went on to say that pay protection is no more than another form of cost for an employer making a reasonable adjustment, analogous to the cost of providing extra training or support to a disabled employee. The EAT's view was that there is no reason in principle why training could for example be a 'step' (reasonable adjustment) within section 20, but pay protection should not. The objectives of the reasonable adjustments duty envisage an element of cost to the employer, and in individual cases tribunals often have regard to financial factors. It would not be an everyday event for a tribunal to conclude that long-term pay protection is required, but it was possible to envisage cases where this may be a reasonable adjustment for an employer to have to make to get an employee back to work or keep an employee in work in accordance with the objective of the equality legislation. The EAT also noted that in changed circumstances, an adjustment may eventually cease to be reasonable for example if the need for a job were to disappear or the economic circumstances of the business changed.

The EAT do not say that pay protection is a reasonable adjustment, simply that it can be a reasonable adjustment, it depends on the circumstances of each case and in particular the resources available to the employer. What is reasonable for G4S may be unreasonable for another employer, for example a much smaller employer   The EAT may have reached a different conclusion, if there was an explicit agreement in summer 2012 about the change in P's role to that of a key runner, carrying a lesser rate of pay. The EAT may have formed a perception that G4S moved away from its original proposal of 2012 in a manner that was less than clear and straightforward, and so caused it to uphold P's appeal and the employment tribunal's decision that maintaining his salary was a reasonable adjustment.

If any lessons are to be learnt from this case they are to ensure that there is careful and thorough consideration of all aspects of an adjustment made, including the willingness of the employee to accept the change. All offers should be clearly and precisely documented and communicated. Ultimately the question in connection with suggested adjustments is whether it is reasonable for the employer to have to take that step.

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