Not unreasonably, employers generally want their employees to turn up for work on a regular and consistent basis. That said, everyone will become sick from time to time, so some level of absenteeism is inevitable. Some employers operate some form of additional incentive for employees who have a good sickness record, and it was this type of scheme which was found to amount to disability discrimination in the recent Employment Appeal Tribunal (EAT) case of Land Registry v Houghton .
In this case, the Land Registry operated a bonus scheme which paid out £900 to eligible employees. In order to qualify for the bonus employees had to satisfy a number of criteria, one of which was that they had not received a formal warning in respect of sickness absence during the relevant financial year. Mr Houghton, and four of his colleagues, were not paid a bonus because they had all received formal warnings in respect of their sickness absence. All five were disabled within the meaning of the Equality Act 2010 and in all cases at least some of their absences were due to their disabilities. They argued that their exclusion meant that they were treated “unfavourably because of something arising in consequence of” their disabilities which amounted to discrimination under the Equality Act 2010. That type of disability discrimination is capable of justification, but Mr Houghton and his colleagues argued that in their cases it could not be justified.
In the original Employment Tribunal hearing, the Tribunal noted that the Land Registry had already made reasonable adjustments to assist the claimants in overcoming their disabilities in that they had changed the usual trigger points at which the sickness warning procedure became engaged. However, the Tribunal concluded that each claimant had received a formal warning for disability related absence, which automatically excluded them from the bonus scheme. Thus, the non-payment of the bonus was the direct result of each claimant’s disability and so the causal link required under the Equality Act was established.
On the question of justification, the Tribunal took into account the fact that the scheme operated in such a way that managers had no discretion to waive the requirement for employees not to have had a formal warning for absenteeism, whereas mangers had a discretion to disregard another part of the scheme which prevented employees who had received formal warnings regarding their behaviour from receiving the bonus. The Tribunal also noted that three of the claimants had improved their attendance after receiving the warning, which again was something which could not be taken into account under the scheme. The Tribunal concluded that the scheme was not objectively justified and so upheld the claims.
The Land Registry’s appeal to the EAT failed. The Land Registry argued that because they operated the scheme as an administrative function, and that the people undertaking that function had no knowledge of the individual’s disability, there was no causal link between the disability and the denial of the bonus. The EAT rejected this argument. It was clear that the reason why the claimants were denied the bonus was their disability related absences.
On the question of justification, the EAT considered that the Tribunal had reached an acceptable conclusion. It was entitled to take into account the lack of managerial discretion under the scheme, and the fact that no credit could be given for any improvement in attendance following the warning.
This case is a reminder to employers that whenever they operate a scheme which excludes some employees from benefiting from it, they run the risk of discrimination claims. It can be possible to have non-discriminatory attendance bonuses, but finding the right approach can be a minefield, so specialist advice should always be sought.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).
Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.