C suffered from depression. She was disabled. She had lengthy absences from work mainly for her disability but also for unrelated sickness. She was entitled to full pay for a maximum of six months, half pay for a maximum of 12 months, in any period of four years. After that she was entitled to be paid at the pension rate of pay. She claimed that R’s failure to pay her full pay when she was off sick was a failure to make a reasonable adjustment.
C had been employed since 1985 and had suffered from depression since 1988. R accepted that she was disabled for the purposes of the DDA 1995. In total, in the four years prior to 15 October 2002 C was absent for 365 days, of which 320 were related to her disability and 45 were for unrelated reasons. Between December 2002 and August 2003 she was only absent for 3 days for non-disability related reasons. In 2004 there were further short absences unrelated to disability but also a period of between three and five days attributable to depression.
R argued that an analysis of C’s history of absence showed that her absences were reduced when her pay was reduced. C argued that the reduction in pay aggravated her condition because it drove her back to work when she was unwell.
The employer’s sick pay rules provided:
You may be allowed: full pay for a maximum of six months in any period of 12 months; and half-pay for a further maximum period of six months, subject normally to an overriding maximum of 12 months’ paid sick absence in any period of four years. After that you may be paid your equivalent pension rate of pay or half pay, whichever is less, unless you have less than two years’ pensionable service in which case the absence will be unpaid.
The rules also provided that C would not receive sick pay if her sickness absence would prevent her from returning to work. There were various provisions about making adjustments under the DDA 1995.
The ET held that the only disadvantage that C claimed she suffered from was a reduction in pay and that R had not put C under any pressure to return to work apart from the pressure which naturally results from reduced pay. R had also assisted C to return to work with a phased return on two occasions. The parties agreed that there had been no need to make special arrangements for C when she returned to work.
The ET held that although C was placed at a substantial disadvantage by the operation of the sick pay rules, the employers had taken reasonable steps to prevent the rules having the disadvantageous effect. They had done all they could to enable C to return to work and had not threatened her with disciplinary proceedings. They also determined that it was not a reasonable adjustment to provide full pay when someone is absent because of disability referring to the following factors:
- Paying someone for however long they are off sick would provide no incentive to return to work;
- that the cost needed to be considered not just from the perspective of C but from the workforce as a whole;
- the difficulty distinguishing between disability related and non-disability related absences;
- the disruption to other activities caused by (1) to (3) above;
- the nature of the activities of the employer and the scale of the undertaking.
The ET held that R was therefore not in breach of duty. The EAT dismissed the appeal and C appealed to the CofA.
The principle question in this case was whether it was a reasonable adjustment to pay C full pay during her sickness absence.
The EAT held that the ET were entitled to have regard to the matters they did when deciding that paying sick pay was not a reasonable adjustment, recognising that the central issue was the cost of the adjustment. The question of whether any reasonable adjustment was required over and above what was provided depends on an objective assessment of what could be done to ameliorate the disadvantage.
R argued that the ET should have focused on the financial needs of C alone or alternatively that even if one had regard to the financial costs of implementing the policy generally this did not relieve the employer of the duty of giving C’s case individual consideration. The EAT, while accepting that the statutory question focused on the particular disability and the individual, determined that unless C “was in any essentially different position to others who were absent because of disability related sickness” then R was entitled to look at the broader ramifications of the judgment.
The EAT commented that it would “in any event…….be wholly invidious for an employer to have to determine whether to increase sick payments by assessing financial hardship suffered by the employee, or the stress resulting from lack of money – stress which would no doubt be equally felt by a non-disabled person absent for a similar period”.
The EAT asked itself whether a claim for enhanced sick pay would ever be sustainable and agreed with the EAT’s view that it would be a very rare case indeed where the adjustment said to be applicable here – that is merely giving higher sick pay than would be payable to a non-disabled person who in general does not suffer the same disability related absences, would be considered necessary as a reasonable adjustment. The EAT considered that the legislation has not perceived this as an appropriate adjustment, although it did not rule out the possibility that it could be one in exceptional circumstances. The EAT gave two principle reasons for saying this:
Firstly – Tribunals would be asked to usurp the management function of deciding whether employers were financially able to meet the costs of modifying their policies by making these enhanced payments. There was a significant difference between making the adjustment for the individual and making an adjustment which will inevitably apply to many others and which will have significant financial implications. The Tribunal would be “entering into a form of wage fixing for the disabled sick.”
Secondly – the purpose of the legislation is to assist the disabled to obtain employment and to integrate them into the workforce. The act is designed to recognise the dignity of the disabled and to require modifications which will enable them to play a full part in the world of work…. it is not to treat them as objects of charity, which the tribunal pointed out, may in fact sometimes and for some people tend to act as a positive disincentive to work.
The CofA largely adopted the EAT’s reasoning. It did address the argument that it would have been a reasonable adjustment to ignore C’s argument that her disability related absences should have been aggregated with her non-disability related sickness absences. The CofA rejected this argument since it relied upon the same disadvantage as the full pay argument – financial hardship causing stress – and non-disabled employees would also have suffered financial hardship causing stress.
This is an interesting case and the first significant authority dealing in detail with the payment of sick pay during absence.
According to the EAT and the CofA in this case it will only be in exceptional circumstances that a person would receive additional sick pay as a reasonable adjustment and employers are entitled to have regard to the consequences of applying the adjustment more broadly – unless there is something that distinguishes the claimant and places them in an exceptional position.
It is interesting to consider the EAT’s discussion of Meikle v Nottinghamshire County Council  ICR 1, (para. 70). In Meikle the EAT had held that not paying the claimant full pay while she was sick put her at a substantial disadvantage. The EAT in O’Hanlon considered that Meikle was one of those exceptional cases because, in that case, the employer had caused the absence through its failure to make reasonable adjustments.
The CofA while not commenting in detail on the EAT’s reasoning said that it saw “much force” in the EAT’s approach. That approach is likely to play an important role in determining the scope of the duty to make adjustments into the future. The aim of legislation, as expressed by the EAT, in O’Hanlon, has been relied upon in later cases (such as Tameside v Mylott) to argue that adjustments are not required where they do nothing to achieve the aim of integrating the disabled person into work. In the later Court of Appeal case of Griffiths v Sec of State for Work and Pensions the Court of Appeal has thrown some doubt on whether the duty can be restricted in this way.
This case did not deal specifically with the comparator. For a more up-to-date consideration of the duty to make adjustments as it applies to sick pay – see Griffiths v Sec of State for Work and Pensions.