17 March 2015

Non-payment of bonus was disability discrimination

The Equality Act 2010 provides protection against “discrimination arising from disability” in the workplace.  Unlike direct or indirect discrimination, this type of discrimination applies uniquely to disabled people, and its impact upon employers and employers is potentially very wide-ranging.

Under “discrimination arising from disability”, any unfavourable treatment which arises in consequence of an employee’s disability may be unlawful.  This includes anything which “is the result, effect or outcome” of a disability, according to the Equality and Human Rights Commission statutory code on the Equality Act. 

The classic example is where an employee is disciplined for sickness absence which is related to a disability: this could be unlawful discrimination, unless it can be objectively justified as a proportionate means of achieving a legitimate aim.  However the protection can apply in many other circumstances, and may come as an unpleasant surprise to employers, as in the recent case of Land Registry v Houghton.  

In this case, the EAT found that failure to pay a bonus to disabled employees because they had received formal warnings for their attendance levels was discrimination arising from a disability. This was the case even though the usual sickness absence process had been relaxed somewhat to make allowance for the employees’ disabilities, and hence increased absence levels, before warnings were triggered.   It was also the case despite that fact that the legislation provides that the alleged discriminator must have specific knowledge of the disability for the protection to apply;  here, the manager who denied the bonus had no such knowledge (although the staff issuing the warnings did).  The employer here was not helped by the fact that managers had a discretion to pay a bonus to employees under a disciplinary warning - but no such flexibility applied where staff had been warned for attendance.

What does this mean for employers?

Employers should always be alert to situations that may engage disability discrimination issues.  Sickness absence is an obvious example, but performance management, disciplinary and, as here, pay issues involving disabled staff should all be raising red flags for management and HR professionals.  This does not mean that disabled staff are immune from adverse action in appropriate circumstances, but managers should be alert to: 

  • Scenarios and individuals for whom disability discrimination may be an issue
  • Whether adverse action in relation to disabled staff is in any way connected to their disability and if so whether it can be justified as a proportionate means of achieving a legitimate aim
  • Whether adjustments are required to procedures affecting disabled staff 
  • Whether policies and procedures (in particular around sickness absence and performance management) are sufficiently flexible to take account of the needs of disabled staff at all stages.

Clearly the practical impact in individual cases will depend on all the circumstances, and specific advice will often be required.  However the most important step will always be for managers to identify and to give real thought to what if any adaptations may be necessary to minimise the adverse impact on staff of their disabilities.

Data Central

Have you checked out our new Data Hub? Data Central contains a range of resources to help our clients minimise the legal, regulatory and commercial risks this data-driven environment presents and ensure that its full value is being realised.

A Guide to Investing in Australian Real Estate

Investing Down Under offers a quick overview of the legal, taxation, FIRB and structuring issues you may encounter when investing in Australian real estate.

A Guide to Doing Business in China

We explore the key issues being considered by clients looking to unlock investment opportunities in the People’s Republic of China.

Doing Business in China
Share on LinkedIn Share on Facebook Share on Twitter
    You might also be interested in

    Employment partner Hilary O’Connor shares her insight with Personnel Today on the ECHR’s ruling that could give employers the right to read personal emails.

    14 January 2016

    Safe Harbor agreements and personal data transfers: King & Wood Mallesons report

    15 October 2015

    Our summary of George Osborne's much anticipated Post-Election Budget

    08 July 2015

    Carl Richards, Employment partner, comments on the demise of references in an article by People Management.

    12 May 2015

    You may also be interested in...

    This site uses cookies to enhance your experience and to help us improve the site. Please see our Privacy Policy for further information. If you continue without changing your settings, we will assume that you are happy to receive these cookies. You can change your cookie settings at any time.

    For more information on which cookies we use then please refer to our Cookie Policy.