O'Hanlon v Commissioners for HM Revenue & Customs

A uniformly applied sick-pay scheme may place a disabled employee at a substantial disadvantage under the Disability Discrimination Act 1995. The reasonable-adjustment duty can require positive steps, but enhanced sick pay for disability-related absence will be exceptional. A flexible scheme, combined with adjustments directed to supporting a return to work, may satisfy the duty.

For disability-related discrimination, the relevant reason is the disability-related absence which triggers the pay reduction. An employer cannot treat its policy as an independent reason. The appropriate comparison is with an employee to whom that absence-related reason does not apply. Financial hardship, without a personal circumstance differentiating the employee from others with disability-related absence, did not require an individual departure from the scheme.

The appellant, a civil servant with clinical depression, had substantial periods of disability-related absence. Under the respondent's contractual sick-pay scheme, her entitlement to full and half pay was exhausted and her pay reduced to pension rate.

The Employment Tribunal at Bury St Edmunds unanimously rejected her disability-discrimination complaints. The Employment Appeal Tribunal unanimously dismissed her appeal in UKEAT/0109/06/MAA. She then appealed to the Court of Appeal.

She no longer challenged the sick-pay scheme itself. She contended that reasonable adjustment required either continued full pay for disability-related absence or separate aggregation of disability-related and other sickness absence. The respondent cross-appealed on substantial disadvantage and less favourable treatment.

Appeal dismissed unanimously. Hooper LJ gave the principal judgment, with which Sedley LJ and Ward LJ agreed.

1. Reasonable adjustment. A common sick-pay scheme can place a disabled employee at substantial disadvantage even though it applies equally to all employees. The duty under Disability Discrimination Act 1995 requires positive steps where reasonable. The respondent had, however, made adjustments to facilitate the appellant's return to work and its scheme contained discretionary and disability-adjustment provisions.
2. Enhanced sick pay. It will be exceptional for increased sick pay, without more, to be a required adjustment. The statutory examples concern assisting disabled people to obtain, retain and perform work. Tribunals should not ordinarily determine the appropriate level of enhanced pay across a large employer's workforce. The proposed adjustment had wider financial, administrative and staff-relations consequences. The appellant identified no personal factor capable of requiring an individual departure from the scheme. Financial hardship and consequential stress did not distinguish her from other employees absent for comparable periods.
3. Authorities and alternatives. Meikle v Nottinghamshire County Council [2005] ICR 1 did not establish that full pay was itself a freestanding adjustment. In that case, the pay consequence followed the employer's prior failure to make workplace adjustments. The non-aggregation argument failed for the same lack of special circumstances. No remission was required.
4. Disability-related discrimination. Although unnecessary to the dismissal of the appeal, the Court agreed with the EAT's view that disability-related absence crossing the sick-pay threshold was the reason for the reduction. Under Clark v Novocold Ltd [1999] ICR 951, the comparison was with an employee not absent for that disability-related reason, not with an employee absent for the same period from non-disability sickness. A neutral policy could not obscure that reason.
5. Justification. Applying Post Office v Jones [2001] EWCA Civ 558, any failure expressly to reconsider discretion could not assist where the employer would inevitably have reached the same result. Sedley LJ recorded reservations, for possible future reconsideration, about the subjective character of the justification test. He considered justification established here on either an objective or subjective basis.

• Court of Appeal (Civil Division) — dismissed the appellant's appeal: [2007] EWCA Civ 283.
• Employment Appeal Tribunal — unanimously dismissed the appeal from the Employment Tribunal: UKEAT/0109/06/MAA.
• Employment Tribunal, Bury St Edmunds — unanimously rejected the appellant's complaints of disability discrimination. A citation was not stated in the judgment.