Ask Auntie – Is it a reasonable adjustment to maintain pay rates indefinitely? Five Top Tips

Dear Auntie

We are a small energy business and we have an engineer who injured his back so he can’t do his job properly anymore. We can’t offer him another engineering role as they all involve heavy lifting which he can’t do. 

We could offer him to send him on a course to retrain as a windfarm specialist but this would take 18 months. Another option is to create a job driving a delivery van to and from the warehouse.  Although this is a less skilled role, the individual says he would do this but we must keep paying him his existing salary. The business is suffering following the crash in oil prices and I’m not sure this is an expense we can afford.

We want to help our employee but I’m concerned paying him his current (higher) salary for a lesser role will impact staff morale if others found out. What do you suggest? 

Kind regards

Di Lemma 

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Dear Di 

A similar issue to the one you have described was raised in the recent case of G4S Cash Solutions (UK) Limited v Powell  (“G4S”) where a disabled employee was dismissed for refusing to accept a pay cut when he was moved to a less skilled role.  The Employment Appeals Tribunal (“EAT”) found that on the facts, this particular dismissal was discriminatory and unfair. The question considered by the EAT was: 

Can protecting a disabled employee’s existing pay be a ‘reasonable adjustment’?

The EAT decided that, in principle, pay protection can be a reasonable adjustment as part of a package of measures to get an employee back to work. 

Under the Equality Act 2010 employers must take ‘steps’ that are ‘reasonable’ to avoid putting a disabled person at a substantial disadvantage. Such ‘steps’ are known as ‘reasonable adjustments’ and the duty to make reasonable adjustments for a person with a disability such as your employee is wide ranging.  

In the G4S case the EAT said that the employee (who was in a similar situation to your employee) should continue to receive his former higher salary indefinitely despite being employed in a lessor role as this was a ‘reasonable adjustment’.

This decision is fairly contentious because previous cases have said that the purpose of disability discrimination legislation is to enable disabled employees to play as full a part as possible in the working world, but that employers must not to treat them as objects of charity.

The employer in the G4S case argued that the main reason for not continuing to pay the existing rate was the likelihood of discontent from other employees. The EAT rejected this argument and said that any anticipated impact on other employees is not generally a factor that should be taken into account when determining the reasonableness of an adjustment. 

The EAT concluded that the employer had substantial resources and protecting the employee’s former salary was easily affordable. It was also relevant that the employer had been paying the employee his former salary for over a year so the employee thought that it was permanent. 

The law envisages an element of cost to the employer in making reasonable adjustments and pay protection is one form of such a cost. From the Tribunal’s perspective, pay protection is no different to paying for additional training or support if an employee was transferred to a new role. In fact, the latter might even be more cost effective for the employer in some cases. 

However, the EAT also made it clear that requiring employers to give long-term pay protection to disabled employees would not be an ‘everyday event’.  The ‘reasonableness’ of potential adjustments must be assessed on a case-by-case basis. 

Your company’s financial situation seems to be very different to that of G4S and therefore it may well be that keeping your employee at the higher rate of pay would not be a ‘reasonable adjustment’ in this case.  Below are our top tips on the steps you should take when considering what adjustments may or may not be reasonable.  

Top Tips 

1. Consider every option, not just the cost, and discuss these options with your employee so you are able to properly meet his needs.
2. Think about the practicalities of offering your employee an alternative role and what level of pay is appropriate for that role.  If it is a lower rate of pay, is it reasonable in the circumstances to protect the rate of pay indefinitely or for a limited period? Whatever route you choose, you must properly consider what is reasonable in the circumstances. 
3. Keep a record of your reasoning and how you came to your decision so you can justify it further down the line should you need to.  
4. Communicate your proposal to your employee in writing. That is, what the terms of the proposed adjustment are and the reasons for proposing it. You should be clear if you are proposing a permanent change to his contract such as, changes to his working hours, duties or pay and seek his agreement to such changes.
5. Keep the situation under review and make clear to him that you will be doing this.  If the business’ or the employee’s situation changes, it may be necessary to rethink what adjustment is now reasonable in the circumstances.