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Bonus entitlement linked to sickness absence constituted disability discrimination

The Employment Appeal Tribunal has upheld a Tribunal’s decision in Land Registry v Houghton that an employee who had been excluded from a bonus scheme following receipt of a warning for sickness absence had been subjected to discrimination arising from disability under the Equality Act 2010. The exclusion was automatic for all absences, even those which related to an employee’s disability. This meant that disabled employees were treated unfavourably.

The employer was the Land Registry. It operated a bonus scheme to all eligible employees in 2012 where bonus payment of £900 would be paid provided, among other things, that the employee did not receive a formal warning in respect of sickness absence in the financial year. Five employees including Mr Houghton bought claims of disability discrimination based on their exclusion from the scheme. They were all “disabled” under the Equality Act 2010 and had accrued sickness absence as a result.

Despite the Land Registry having made reasonable adjustments in respect of the application of the sickness absence warning procedure, had the employees been given a warning for misconduct, this warning could be disapplied for the purposes of the bonus scheme. This was not the case in relation to a warning for sickness absence. The consequence, result, effect or outcome of the claimant’s disability was the exclusion from the bonus scheme. There was a causal link between the disability and the treatment. The Tribunal held that the decision to exclude the employees could not be objectively justified because, among other things, managers had no discretion under the scheme.

The Land Registry appealed but the appeal was dismissed. The Employment Appeal Tribunal concluded that the Claimant was treated unfavourably by being excluded from the bonus scheme as a result of a warning for disability related absence. It did not matter that the decision to exclude an employee was automatic without consideration of the employee’s health. The EAT agreed with the Tribunal’s ruling in respect of justification.

The intention of the scheme is unlikely to be a factor in the Tribunal’s decision. When deciding whether to implement or exclude employees from a policy or scheme, consideration should be given to whether this could result in less favourable or unfavourable treatment based on a protected characteristic. The policy or scheme should be practical as well as legal. If you would like to discuss a scheme or policy that you operate and how this could affect your business, look no further. We are here to help. Give us a whirl.

 

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