Sick note

In O’Hanlon v HM Revenue & Customs, the Employment Appeal Tribunal (EAT) said that failing to pay a disabled person full pay while on sick leave did not amount to a failure to make a reasonable adjustment.

What were the basic facts?

Mrs O’Hanlon started work for HMRC in 1985. She was diagnosed with clinical depression in 1988, after which she was off for long periods of sick leave.

The Revenue’s sick pay scheme provided for six months full pay and six months half pay, subject to a maximum of 12 months paid sick leave in any four years. After that employees were only entitled to their equivalent pension rate of pay, or half pay, whichever was less.

  • Mrs O’Hanlon lodged a tribunal claim, stating that her employers should have paid her in full by making one of the following two adjustments:

    by disregarding her disability related absence for the purposes of the sick pay rules, or
    by disregarding her disability related absence for the purposes of the sick pay rules so that it did not trigger the points at which half pay and pensionable pay became payable.

Her sick leave would then have totalled less than six months.

What did the tribunal decide?

The tribunal said that the rules on sick pay constituted a “provision, criteria or practice” which placed Mrs O’Hanlon at a substantial disadvantage in comparison with people who were not disabled.

As such, the Revenue were under a duty to make reasonable adjustments. The tribunal decided that the first adjustment was not reasonable, however, mainly because of cost considerations. Although the Revenue could afford to pay sick pay to Mrs O’Hanlon indefinitely, it could not sustain that approach for all its disabled employees.

The tribunal also said she was not discriminated against for a reason related to her disability, given that she was treated in exactly the same way as a non-disabled person. However, it went on to say that even if it did amount to unlawful discrimination, the Revenue’s treatment of her was justified because of the costs involved.

What did the EAT decide?

The EAT agreed with the tribunal that Mrs O’Hanlon had been disadvantaged by the sick pay scheme rules. However, it said that it would be “a very rare case indeed” where giving higher sick pay to a disabled employee would be considered a reasonable adjustment.

First of all, it pointed out that tribunals would end up “entering into a form of wage fixing for the disabled sick”. Secondly, that the point of the Act was not to treat disabled people “as objects of charity”, but to require modifications to help disabled people play a full part in the “world of work”.

As for the question of disability discrimination, it said that the correct comparator was someone who had not been off work at all, as opposed to someone who had been off work for non-disability related sickness.

The employer was wrong to argue that it was the policy, and not the disability, that caused the difference in treatment. The real reason for her treatment was because she had been off work for 26 weeks. And the underlying reason for that absence was her disability. The Revenue had, therefore, discriminated against her.

But was it justified? The tribunal was right to decide that there was no reasonable adjustment which could be made to the level of sick pay. It also found that there were powerful economic reasons for the rule adopted, which were “material and substantial”.

In any event, it said that “justification could simply be the fact that the employer considered it appropriate to pay those who attend work and contribute to the operation more than those whose absence prevents that”.