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Employers can apply sick pay policy to disabled employees

Smoking ban

Staff absence cost UK £13bn in 2005

Sickness Absence costs employers £12.2 billion in 2004

Employers can apply sick pay policy to disabled employees

Since the case of Meikle v Nottinghamshire County Council, there has been a degree of uncertainty as to whether employers breach the Disability Discrimination Act (DDA) if they fail to provide full pay to employees who are off sick as a result of a disability-related illness. However, the Employment Appeal Tribunal (EAT) has recently decided, in the case of O'Hanlon v Commissioners of HM Revenue & Customs, that employers will not be guilty of unlawful discrimination if they apply their sick pay policy to employees absent from work due to a disability-related illness where that results in the employee receiving less than their full pay.

Mrs O'Hanlon, who was employed by Her Majesty's Revenue & Customs (HMRC), suffered from clinical depression and was disabled within the meaning of the DDA. Over four years, she had a total of 365 days sick leave.

HMRC's sick pay policy provided that full pay would be provided for up to six months absence in any 12 months, and half pay for up to a further six months, subject to an overriding maximum of 12 months paid leave in any four-year period.

Mrs O'Hanlon brought a claim under the DDA, contending that she was substantially disadvantaged by her employer's policy compared to a non-disabled person, and that HMRC had failed to make reasonable adjustments to its policy so as to enable her to continue to receive full pay for all of her period of absence. She also claimed that she had been subject to disability-related discrimination since her absence was related to her disability and the failure to continue paying her was unjustified.

The EAT decided that there was discrimination on the grounds of disability as a result of the reduced sick pay. However, the DDA allows discrimination if it can be justified. There were, in the EAT's view, powerful economic reasons for the sick pay policy adopted. It would have cost HMRC a very significant sum (estimated to be in the region of 6 million per annum) to pay full pay to all disabled employees for their entire period of absence.

Mrs O'Hanlon argued that the Tribunal had focused too much on the wider financial implications of the policy, rather than her own particular hardship. Even if there is a proper justification for adopting a particular policy, she argued, the facts of each individual case should be the main focus.

The EAT observed that it had never been Mrs O'Hanlon's case that she had suffered any particular hardship over and above that suffered by others who were absent through disability-related sickness. In any event, the EAT held that it would be "invidious for an employer to have to determine whether to increase sick payments by assessing the financial hardship suffered by the employee, or the stress resulting from lack of money - stress which no doubt would be equally felt by a non-disabled person absent for a similar period".

The EAT went on to consider the wider question of whether it will ever be reasonable to expect an employer to provide enhanced sick pay to a disabled employee. It made the following observations:

It will be a very rare case indeed where providing higher sick pay than would be payable to a non-disabled person who does not suffer the same disability-related absences, would be considered necessary as a reasonable adjustment.

If the Tribunal were to have to decide whether an employee's claim for more generous sick pay should override the other demands on the business, it would be "entering into a form of wage fixing for the disabled".

The DDA is designed to recognise the dignity of the disabled and to require modifications that will enable them to play a full part in the world of work, not to treat them as objects of charity (which may in some cases act as a disincentive to return to work).

Although the examples of reasonable adjustments given in section 18B(3) of the DDA are not exhaustive, they are all aimed at integrating disabled persons into the workforce. None of them suggests that it will ever be necessary simply to put more money into the wage packet of the disabled.

Employers will welcome this decision. However, the EAT did try to distinguish this case from the Meikle case. In the Meikle case, the employer was held to have contributed to the employee's illness and caused it to last longer, as a result of its failure to provide the employee with equipment that would have helped her work and alleviated her health problems. In this situation, the payment of reduced pay may not be justified.

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