Going rate – maintaining higher pay not a reasonable adjustment

Hogan Lovells

Hogan Lovells

In Aleem v E-Act Academy Trust the UK EAT decided that it was not a reasonable adjustment to continue to pay an employee at her previous higher rate when she moved to a different lower-paid job because of a disability. Although it was a reasonable adjustment to maintain her salary at the higher rate for a period while the new job was temporary and a grievance process was completed, the employer was not required to continue to pay the higher rate once the move to the new role became permanent.

What happened

Mrs Aleem was a science teacher who became unable to work full-time as a result of a disability. On her return to work after a sickness absence, she worked as a cover supervisor instead of undertaking normal teaching duties. She continued to be paid as a teacher, although the cover supervisor role attracted a lower rate of pay. That remained the position while her grievance was being dealt with and for a further period after the grievance was rejected to allow options to be discussed.

However, when Mrs Aleem accepted a permanent cover supervisor role, the employer made it clear that she would receive the going rate for the position. She claimed that by not maintaining her teacher’s salary, her employer had failed to make a reasonable adjustment for her disability. The employment tribunal rejected the claim, relying in part on “financial difficulties” the school faced. She appealed to the EAT, arguing that there was no hard evidence about those financial difficulties and the tribunal’s decision was wrong.

The EAT rejected her appeal. There is no rule of law that an employer can only resist a claim of this kind if it can show some form of serious financial difficulty. The question is what it is reasonable for an employer to do considering all the relevant circumstances, including practicability, cost, service delivery and business efficiency. In this case the tribunal took into account the fact that the cost of maintaining Mrs Aleem’s salary indefinitely would be substantial, against the backdrop of a publicly funded institution facing some financial pressures.

Regardless of the extent of those financial pressures, the tribunal’s conclusion was wholly proper. The fact that other cases had found that it was a reasonable adjustment to offer pay protection on an ongoing basis did not mean that it was a reasonable adjustment in this case. It was relevant that Mrs Aleem had not been told that pay protection was permanent. Indeed, the employer was at pains to make it clear that her pay would be reduced if she accepted the position on a permanent basis. There was nothing unusual or exceptional about the case that made maintaining the higher rate of pay on an on-going basis a reasonable adjustment.

Next steps

The earlier EAT decision in G4S Cash Solutions (UK) Ltd v Powell suggested that maintaining an employee’s rate of pay despite moving to a lower paid role could be a reasonable adjustment for a disability. This decision makes it clear that this will not always be the case. The cost of the adjustment will be a relevant factor, as will what the employee has been told or led to believe about its duration. Here there were good reasons for maintaining the previous rate of pay for a period, but it did not follow that this was still the case once the new role was permanent and it was clear to the employee that her pay would reduce if she accepted the position on that basis.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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