G4S Cash Solutions (UK) Ltd v Mr A Powell UKEAT/0243/15/RN

C succeeded in complaints of unfair dismissal and disability discrimination.  R appealed and C cross-appealed the finding that his contract of employment had been varied.

Facts

R replenished and maintained cash machines.  It employer engineers to do so.  C was employed in a number of roles including driver and engineer.  When his role had changed he was served with a full record of the changes.  C began to experience a worsening problem with his lower back and became unfit to perform jobs involving heavy lifting or working in confined spaces.  It was agreed that he was disabled for the purposes of the Equality Act 2010 from mid 2012.

After C became disabled R gave C, who was previously working as an engineer, a new role as a “key runner” at his existing rate of pay.  This involved driving from various places to deliver parts to engineers.  Engineers could then use public transport.  C worked as a key runner until the termination of his employment.  By May 2013 R was considering abolishing the key runner role.  C was asked to look at a list of vacancies.  R said that if there was nothing available it would dismiss him on medical grounds.  C’s solicitors argued that R was attempting to change his terms and conditions and raised a grievance.  R subsequently decided to make the key runner position permanent but only at a cheaper rate.  This resulted in a reduction of salary which C was unwilling to accept.  No other suitable vacancy could be identified so an impasse was reached.  C was dismissed on 08 October 2013.  R remained willing to offer him the key runner role at a reduced rate of pay.

The ET rejected the C’s argument that his contract had been varied and that he had a contractual right to the higher pay.  The ET went on to consider whether R had failed to make the reasonable adjustment of allowing him to continue as a key runner at an engineer’s salary.   The ET held that R had failed to make a reasonable adjustment by maintaining his salary.

Held

The EAT held that the ET was wrong to conclude that the contract had not been varied so that C was entitled to be paid as a key runner at his previous salary.

However, the EAT upheld the ET’s decision that it would have been a reasonable adjustment to maintain C’s salary in his key runner role.  The EAT was unable to identify any error of law that the ET had made.

C argued that the requirement for him to work as an engineer was a PCP.  This placed him at a disadvantage because he was unfit for the role and liable to be dismissed.  C also argued that the fact that he faced a reduction in pay by virtue of a transfer to another role was also a disadvantage.

R argued that the ET’s decision was “fundamentally contrary to the purpose of the reasonable adjustment provisions in the disability legislation.”  The step was not one which it was required to take.  The purpose of the duty was to assist persons who have a disability to obtain employment and integrate them into the workforce.  It is not to treat them as objects of charity (relying on O’Hanlon).  R  argued that if applied across the board the adjustment might have huge implications for R’s budget.

The EAT drew a comparison with the Archibald case.  Whereas in Archibald the claimant suffered the disadvantage of being liable to be dismissed, in this case the disadvantage was being faced with the choice of being dismissed or taking  job at a lower rate of pay.   The ET had not erred in its description of the disadvantage.    The real issue was whether  it reasonable for the Respondent to have to place C in the key runner role while protecting his pay.  R had been prepared to offer the role to him at the lower rate of pay.

The EAT considered whether the ET reached a finding that was fundamentally contrary to the purpose of the reasonable adjustments duty.  The EAT then set out some relevant characteristics of the Equality Act 2010.  Firstly, it was  inherent in the Act that the duty to make adjustments might require the employer to treat a disabled employee more favourably than others.   This could include transferring the employee to another role,  even at a higher grade (see Archibald).  The EAT rejected the argument that the duty could be read as excluding any requirement upon an employer to protect an employee’s pay in conjunction with other measures to counter the disadvantage that was being suffered.  The EAT relied on Elias J’s judgment in Griffiths which stated:

“there is no reason artificially to narrow the concept of what constitutes a ‘step’ within the meaning of s.20(3).  Any modification of, or qualification to, the PCP in question which would or might remove the substantial disadvantage caused by the PCP is in principle capable of amount to a relevant step.  The only question is whether it is reasonable for it to be taken.”

The EAT then states that many forms of measure which it will be reasonable for an employer to have to take will involve a cost to the employer.  It may be direct, in the form of provision of training and support, it may be indirect, in that measures will render the disabled person’s employment less productive so that the employer is, in effect subsidising the employee’s wages.  The EAT could see no principle why pay protection , which is no more than another potential cost, should be excluded as a ‘step.’  Referring to both O’Hanlon and Meikle v Nottinghamshire County Council  the EAT identified the real issue as to whether it was reasonable in the circumstances to require the employer to take the step and particularly relevant to that was whether granting an adjustment in the individual circumstances would inevitably require it to be granted to others.

The EAT then considered the influence of cost on the question of reasonableness, and in particular the case of Cordell v Foreign and Commonwealth Office [2012] ICR 280.

“there is no objective measure that can be used to balance what are in truth two completely different kinds of consideration – on the one hand the disadvantage to the employee if the adjustments are made and, on the other, the cost of making them.  The Act requires tribunals to make a judgment, ultimately on the basis of what they consider right and just in their capacity as… an industrial jury.  That is not to say that Tribunals should simply stick a finger in the air.  Their judgment of what level of cost it is reasonable to expect an employer to incur can be informed by a variety of considerations that may help them to see the required expenditure in context and proportion…  the relevant considerations may include (and we are not intending to be exhaustive): what the employer has chosen to spend in what might be though to be comparable situations; what other employers are prepared to spend; and any collective agreement or other indication of what level of expenditure is regarded as appropriate….”

According to the EAT in G4S the Elias P’s comments in O’Hanlon, that the objective of the legislation was not to treat disabled persons as “objects of charity,” had to be read in context of the appeal, where the proposed adjustment was simply to augment sick pay.  The objectives of the legislation plainly envisaged an element of cost to the employer; if an adjustment is one which it is reasonable for an employer to have to make, it is not a matter of charity, but a legal requirement reflecting the expectations of Parliament and Society.  The objective is to keep employees in work, and there was no reason why a package of measures for that purpose,  including some pay protection, should not be a reasonable adjustment.

 

Comment

This is a very interesting case.   It reminds us of the importance of distinguishing between whether the duty arises and how the duty can be satisfied.  The question of whether the duty arises and whether the steps qualifies as a “step” is the first question.  Here both the EAT in this case, and the CofA in Griffiths, have been explicit in their requirement for practitioners to have regard to the plain wording of the statute.  At this stage there appears to be little scope for limiting the application of the duty by reference to the personal circumstances of C or the purpose of the statute.

Some practitioners may remember the case of Kenny v Hampshire Constabulary (1999) IRLR 76 EAT.  In that case a disabled applicant for employment needed assistance from other employees to use the toilet during his working day.  Unfortunately no one was willing to assist and so the employer withdrew its offer of employment.  The more restrictive definition of “arrangement” under the DDA 1995 meant that Mr Kenny’s need to assistance was not caused by his employer’s “arrangements”.  If the broader definition of PCP under the Equality Act 2010 had applied to Mr Kenny then it is likely that he would have suffered a relevant disadvantage.   The PCP could be described as a practice of requiring all employees to use the lavatory unaided in order to be offered a job.  This PCP would have placed Mr Kenny at a disadvantage.  It is not now an answer, as it was in 1999, that the Act placed no duty on the employer to meet Mr Kenny’s personal needs.

Instead the real question  is whether and to what extent it is reasonable for an employer to make such an adjustment.  Clearly there are limits as to what an employer can be required to do – see O’Hanlon.   Some cases admit an easy answer.  Others do not.  The limits are not at all clear and it may not be possible to define where they lie.  Cases such as Tameside Hospital v Mylot are better seen as instances when it was not reasonable to make the adjustment rather than as instances when the duty to make an adjustment did not arise.  It is not (as at 2016) possible to identify a consistent use of the purpose of the legislation that would dispose of an argument that it would be a reasonable adjustment to pay sick pay or grant pay protection.