Disability and Adjustments – What is reasonable?

Well it has been some time since my last post.  I hope you have missed me.  I have been very busy since we last met, having set up Lionshead Law which started trading on 2 September.   Exciting times!  However, I am back and today I will be discussing whether or not an employer must automatically offer a disabled employee an alternative role following a company restructure, even though other affected staff are required to undergo a competitive interview process.    

The premise behind this argument is that an employer is under a duty to make reasonable adjustments where a provision, criterion or practice (PCP) puts a disabled employee at a disadvantage when compared to an employee who is not suffering from that disability.   In the case of a company reorganisation resulting in the changing of job roles, the PCP would be the requirement for all affected staff to competitively interview for one of the newly created roles.  Therefore, the first question to decide is whether the requirement to apply for a new post puts the disabled person at a disadvantage when compared to his colleagues. 

If the answer to that question is yes (and it invariably will be), then the next question is whether there is any reasonable adjustment that the employer can make to effectively level the playing field.   In the EAT case of Wade v Sheffield Hallam University it was held that the university was not in breach of its duty to make a reasonable adjustment when the Claimant was not automatically offered a new post when her original post was deleted following a reorganisation. 

In this case the Claimant’s role disappeared following a restructure at the university.  She applied for a new post and was unsuccessful because she did not fulfil two of the essential criteria which the post required.   Two years later she applied for the same post and was, again, rejected.  She argued that she should not have had to apply for the post competitively as her disability put her at a disadvantage when compared to individuals who did not suffer from her disability and that as such, the university should have made an adjustment to the process enabling her to be automatically selected for the post without having to compete against her non-disabled colleagues.

The question came down to reasonableness.  Whilst it may be a reasonable adjustment for a company to appoint a disabled individual to a new post without requiring him to interview for it, what ultimately decided this case in the university’s favour was that the employee concerned did not fulfil all of the essential criteria for the position.  It was deemed not reasonable to require the university to appoint someone to a post where only some of the essential criteria had been fulfilled.   However, had the employee fulfilled all the essential criteria then it is likely that it would have been a reasonable adjustment on the part of the university to simply appoint her to the post rather than require her to apply for it alongside her colleagues.

Companies  in similar situations with disabled employees therefore need to be careful when carrying out restructures/redundancies.  Where they are considering requiring affected staff to apply to be considered for new roles/alternative positions, if it is determined that an affected employee who is also disabled fulfils all of the essential criteria for an alternative role, then it may well be an act of unlawful discrimination if that person is not offered the post automatically but instead required to apply for it alongside his colleagues.

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Redundant Employees were Unfairly Dismissed

In the EAT case of Contract Bottling Ltd v Cave (1) and McNaughton (2) it was held that the reason for the Appellants’ dismissals was, indeed, redundancy even though the jobs they had both performed continued to exist after their dismissals. How so?

The key statutory provision is section 139(1) of the ERA 1996, which defines redundancy in the following way:

“For the purposes of this Act an employee who is dismissed should be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to—

(a) the fact that his employer has ceased or intends to cease—

(i) to carry on the business for the purposes of which the employee was employed by him, or

(ii) to carry on that business in the place where the employee was employed, or

(b) the fact that the requirements of that business—

(i) for employees to carry out work of a particular kind, or

(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

Have ceased or diminished or are expected to cease or diminish.”

In this case the employer’s case was that it had a reduced requirement for employees to carry out work of a particular kind. However, strangely, although the cuts were only needed amongst administration and accounts staff, it decided to put ALL its staff in the pool and apply a generic selection matrix in order to determine who would be dismissed. What this meant was that people were retained in administration and accounts and others from other departments where such a reduction in headcount was not required, were dismissed. The Employment Tribunal mistakenly held that, because the individuals who were dismissed were not from the departments where the reduction in headcount was needed, their dismissals could not have been by reason of redundancy. However, the EAT overturned this decision on the basis that it was perfectly clear that there was a reduced requirement in the company for employees to carry out work of a particular kind. It was irrelevant, for the purpose of the definition, whether the pool from which the staff were selected went beyond the areas where reduction in headcount was needed. What the pool for selection does is help determine whether or not the decision to dismiss for redundancy was fair.

As a result, the EAT upheld the company’s appeal against the Tribunal’s finding that the reason for the dismissals was not redundancy. However, it agreed with Tribunal’s finding that the dismissals were, nevertheless, unfair. It then remitted the case back to the original Tribunal for it to assess whether the compensation awarded to Cave and McNaughton should be subject to a Polkey reduction on the basis that they would likely have been dismissed anyway even if a fair procedure had been followed.

Interestingly, the original tribunal’s finding of unfair dismissal was not centred around the somewhat unusual (to put it mildly) pool for selection, but was instead highly critical of the process for selection from that pool. This case is therefore also useful as an illustration of how difficult it is for an employment tribunal to criticise the pool from which employees are selected for redundancy provided the employer can (a) show it has given real consideration to the pool and (b) provide evidence to establish that it was not outside the range of reasonable responses to select from such a pool.

Reduction in Headcount not Needed for a Redundancy

“An employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to – […]

(b) the fact that the requirements of that business –

(i) for employees to carry out work of a particular kind […]

have ceased or diminished or are expected to cease or diminish.

It was held in the recent EAT case of Packman t/a Packman Lucas Associates v Fauchon that for a redundancy situation to arise there does not necessarily need to be a reduction in headcount.  The focus must be on the employer’s requirements for employees generally to carry out work of a particular kind as opposed to the requirement for a particular employee to carry out work of a particular kind.  What this means is that the focus must be on the requirements of the business, not the particular contractual obligations of the employee although clearly these will be linked.

The particular facts of this case are as follows:

Ms Fauchon was a book-keeper for Packman.  However, there was a downturn in the business and, at the same time, Packman introduced an accountancy software package.  As a result Packman had a erduced need for book-keeping and therefore asked Ms Fauchon to reduce her hours.  She refused to work reduced hours and was therefore dismissed.  She brought tribunal proceedings against Packman and it was held that she had been dismissed by reason of redundancy and as such was entitled to a statutory redundancy payment.  Packman appealed but the appeal was dismissed.

The EAT held that whilst there may be redundancy situations in which an employer needs fewer employees to do the same amount of work, redundancy situations also arise where the amount of work available for the same number of employees is reduced (as in this case).  However, if there is just as much work for just as many employees, then a dismissal arising out of the situation would not be a redundancy.  It is not sufficient for an employer to simply say that it wants the same amount of work to be done by the same number of employees but over shorter hours.

Redundancy – Can it be reasonable to refuse an offer a tribunal finds a reasonable employee would have accepted?

This was the conundrum considered by the EAT in the case of Readman v Devon Primary Care Trust.

In a redundancy situation, if an employee unreasonably refuses an offer of suitable alternative employment made by his or her employer, that employee will forfeit his or her right to a redundancy payment.  In this case, the EAT considered whether Mrs Readman, a nurse, had been unreasonable in refusing an offer of suitable alternative employment which the employment tribunal had found that a reasonable employee would have accepted.  The EAT held that she had not saying that the test of reasonablness is a subjective rather than a wholly objective one.

Mrs Readman was a nurse at the Trust.  She had been placed at risk of redundancy but had been offered the option of three alternative posts.  Two of the posts were not deemed suitable, but one of them, a Hospital Matron position, was correctly found by the employment tribunal to amount to suitable alternative employment under s 141(3) of the Employment Rights Act 1996.  However, Mrs Readman refused this post.  She said that as she had worked in community nursing since 1985, she did not wish to return to working in a hospital setting.   The Trust therefore sought to deny her a redundancy payment, saying it was not obliged to pay her one as a result of the provisions of s 141 of the ERA. The Employment Tribunal found in the Trust’s favour on the grounds that her refusal had been unreasonable, having considered whether a reasonable employee would have accepted the employer’s offer and concluding that he or she would have done.

Mrs Readman appealed to the EAT which overturned the original decision. The EAT held that the Tribunal had erred in applying a wholly objective test to reasonableness when, in fact, the test is whether the employee had acted reasonably in refusing the offer.  In this case, the EAT held that when the particular circumstances in this case were taken into consideration, it was clear that Mrs Readman had not acted unreasonably as she had sound and justifiable reasons for refusing the offer.  Mrs Readman was therefore found to be entitled to a redundancy payment.

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