London Clubs Management Ltd v Hood [2001] IRLR 719
Mills v London Borough of Hillingdon, 18 October 2001 EAT unreported
Can an employer's failure to pay sick pay amount to less favourable treatment or a failure to adjust under the Disability Discrimination Act 1995? We previously reported the successful Employment Tribunal decision of Hood v London Clubs Management Ltd (LELR 43, February 2000) which held that it could. The Employment Appeal Tribunal have now cast some doubt on that decision in a judgement which raises as many questions as it answers.
Mr Hood suffered from severe headaches and was disabled within the meaning of the Act. His employer operated a discretionary sick pay scheme. On his taking time off work due to his headaches, they decided that in the light of financial difficulties they would stop paying him sick pay. His Tribunal claim was presented as one of a failure to pay sick pay and a failure to adjust, a comparison being made with other people who were not disabled but whom were paid sick pay. The Tribunal upheld his claim, finding that following Clark v Novacold 1999 IRLR 318 the treatment he was complaining of was a failure to pay ordinary wages, so that the appropriate comparison was with people who continued to work and receive pay.
The EAT approached the matter differently, drawing a distinction between a failure to pay ordinary pay, and a failure to pay sick pay and said that the Tribunal had conflated the two. Mr Hood's case was a failure to pay sick pay. But this failure to pay sick pay was not related to Mr Hood's disability, but rather to a policy of not paying sick pay resulting from financial difficulties. So the less favourable treatment claim failed. The second issue, a failure to adjust, has been referred back to the Tribunal.
The case illustrates the care with which the less favourable treatment has to be identified, and the need to tie the less favourable treatment to the disability. A claim for non-payment of sick pay may still amount to less favourable treatment under the Act, but it must be decided whether the case is one of a failure to pay ordinary wages due to absence, which is likely to be disability related, or a failure to pay sick pay, which may or may not be.
The EAT also confirm that sick pay arrangements do fall within the scope of 'reasonable adjustments' under section 6. The employers had argued that the words of section 6(1) 'any arrangements made by or on behalf of an employer' did not cover monetary benefits, and also was excluded by section 6(11) which excludes benefits under occupational pension schemes and other benefits payable under schemes. This argument was conclusively rejected by the EAT. Monetary benefits may be arrangements. Sick pay is paid by an employer to an employee, not under a scheme.
As it happens, a different division of the EAT has recently considered a similar point as to whether sick pay fell within the 'arrangements' provisions of Section 6. In Mills v London Borough of Hillingdon, the EAT had to consider whether a failure to pay sick pay due to an administrative error amounted to an arrangement under section 6: they found that it did not. An error is not an arrangement, and the Applicant's claim failed.