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In a case that could have had serious implications for the payment of sick pay to disabled employees, the London Employment Appeal Tribunal (EAT) has rejected an appeal from a disabled woman that the employer, by not making adjustments to sick pay rules, had discriminated on the grounds of disablement.
In a decision given on 4 August 2006, the EAT rejected the appeal in the case O'Hanlon v HM Revenue and Customs. Mrs. O'Hanlon suffered from clinical depression and was absent from work for extended periods of time between 2001 and 2004. The HMRC sick pay scheme allowed full pay for up to 6 months, followed by up to 6 months at half pay, followed by the pension rate of pay. Mrs. O'Hanlon's absences meant that, from 2003, she was receiving her pension rate of pay during her continuing absences.
In 2005, Mrs. O'Hanlon made a claim to the Employment Tribunal that she should have received full pay for all disability-related sickness absences, that she was substantially disadvantaged by the sick pay rules and that the employers had failed to make a reasonable adjustment to counter the disadvantage. She also claimed that she had been the subject of unjustified disability-related discrimination.
The Disability Discrimination Act 1995 requires employers to make adjustments to provisions, criteria, practices or physical features that put disabled persons at a substantial disadvantage in comparison with persons who are not disabled. An employer discriminates against a disabled person if he cannot demonstrate that less favourable treatment is justified or refuses to make reasonable adjustments.
The Act gives specific examples of what factors should be considered in deciding whether or not it would be reasonable for an employer to make adjustment. These include the financial and other costs that would be incurred. The Act also gives examples of reasonable adjustments, such as giving some of the employee's duties to someone else, transferring the employee to another job, and altering the employee's hours of work.
The original Employment Tribunal heard that, to have paid Mrs. O'Hanlon full pay, the additional cost would have been £4,722.87 and that, if the sick pay scheme rules were changed throughout HMRC, there would likely be an additional annual cost of £6 million.
The Tribunal decided that HMRC's sick pay scheme did put Mrs. O'Hanlon at a substantial disadvantage, that HMRC had taken such steps as were reasonable in all the circumstances, and that it was not reasonable for HMRC to pay her salary in full.
In considering the appeal, the EAT agreed with the Tribunal's view that the purpose of the legislation is to assist disabled persons to obtain employment and integrate them into the workforce. All of the examples of reasonable adjustments that employers might make are of this nature. It is true that they are only examples and are not an exhaustive list, but none of them suggests that it will ever be necessary simply to put more money into the wage packet of the disabled. 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 intended to treat them as objects of charity which, as the Tribunal had pointed out, may tend to act as a positive disincentive to return to work.
The EAT agreed that, where it would cost a very significant sum to pay full pay to all disabled employees, it would be reasonable for an employer to argue that such an adjustment would be unreasonable. However, the EAT also observed that "the justification could simply be the fact that the employer considered it appropriate to pay those who attend work and contribute to the operation more than those whose absence prevents that."
...back to 10 August 2006
Source:
O'Hanlon v HM Revenue & Customs
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