Aerial cityscape view of London and the River Thames, England, United Kingdom

In brief

The EAT has held that on the facts of this case it was a reasonable adjustment to promise to pay a severance package to a disabled employee, if certain circumstances arose in the future, as part of a package of adjustments designed to enable the employee to continue working. In this case, the promise was part of an undertaking to keep an employee with anxiety from working with two colleagues, and, if that became impossible, to pay a redundancy severance package. This decision is surprising but other cases where this type of undertaking would be reasonable could prove rare.


Background

Employers are under a duty to make reasonable adjustments for disabled employees where something about the workplace or the employee’s job places them at a substantial disadvantage compared to a non-disabled employees. Substantial means anything more than minor or trivial. In broad terms, the purpose of the duty to make reasonable adjustments is to enable the disabled employee to work.

If a claimant wins a reasonable adjustment claim (or any discrimination claim), the employment tribunal can make recommendations to the employer to obviate or reduce the effect of the failure to have made the adjustment. There is no mechanism to force the employer to implement a recommendation and the consequences of failing to comply with a recommendation are limited: it could result in additional compensation, but there is no guidance on how this would be calculated.

Facts

The employee (H) worked for Lloyds Bank. She submitted a grievance alleging bullying by two colleagues. The grievance was not upheld; however, H began to suffer from depression and alleged she suffered a high level of anxiety over the prospect of working with the two colleagues. She sought an undertaking from Lloyds that:

  • They would guarantee she would never work with the two colleagues concerned.
  • If at a later stage that was not possible, then she would be offered a severance package equivalent to a package provided on redundancy.

By this stage the two colleagues already worked in different parts of the country.  However, Lloyds refused to give any undertaking, offering only words of comfort and to use best endeavours. It refused to offer a redundancy package if H did have to work with the colleagues in the future as H would not be redundant. H sued for failure to make reasonable adjustments.

The key question in this case was whether it would have been reasonable for Lloyds to give the proposed undertaking.

Decision

The employment tribunal and the EAT held that it was reasonable.

Lloyds argued that the severance pay aspect of the undertaking was inappropriate because it was a provision to leave work, rather than aimed at keeping H in employment. The EAT accepted that the purpose of reasonable adjustments is to keep an employee in work and not to make provision to leave work, but found that that the undertaking in this case would have the effect of alleviating the stress and fear produced by H’s anxiety, thereby enabling H to remain at work. It described the severance pay as having the underlying purpose of keeping the employee at work and as giving an incentive for Lloyds to ensure H did not have to work with the relevant colleagues in the future. The EAT further noted that it was acceptable for reasonable adjustments to have positive financial or remuneration-related implications for H.

The EAT also dealt with an issue on remedy. In short, the EAT’s judgment was heavily in favour of the tribunal recommending that Lloyds offer the proposed undertaking to H (who remained in employment), although this issue has been remitted to the tribunal to decide.

Comment

This judgment demonstrates the broad reach of the duty to make reasonable adjustments. Nevertheless, the decision to require an undertaking to pay severance is surprising and novel. It is worth noting though that it was a key element of the decision that the undertaking was part of a package to enable the employee to return to work; although it might still be open to question as to whether the severance package was consistent with the underlying principle of the duty to make reasonable adjustments not being to facilitate an employee’s departure.  In any event, the case does not support the argument that an employee who cannot return to work because of a disability should be offered a redundancy package.

The inter-staff difficulties arising from unsuccessful bullying and harassment allegations, including anxiety about working together, will be familiar to many employers. Nevertheless, the EAT commented that cases suited to this type of undertaking will, perhaps, be rare. In this case, the employer was a large organisation with multiple sites and the two colleagues already did not work at the same location, and so there was arguably only ever a small risk that the undertaking to pay severance would kick in. A tribunal might be more reluctant to consider such an undertaking as reasonable if it were highly likely to come to pass. The tribunal also concluded in this case that the undertaking would not have set a precedent which would have caused wider problems for the employer, which will be a question of fact in any particular case.

In this case, there had also been difficulties with communications between the parties (the results of a mediation were unknown to the employer because the mediator had died the following day and the request for an undertaking was not received until after tribunal proceedings had been started) and this might have limited the opportunity to explore alternative ways of reassuring H and facilitating a return to work.  It also appears there was no medical evidence as to whether the undertaking would in fact have alleviated a disadvantage arising from H’s disability and whether other adjustments could have achieved this.  Future situations where disabled employees are anxious to return to work will need to be considered on their own particular facts.

The EAT’s decision that it was open to the tribunal to make a recommendation that the employer should give an undertaking (which might then create free-standing contractual liabilities for the employer) was also surprising. This might lead to further applications for recommendations that employers give ongoing commitments. However, recommendations have to alleviate the effects of discriminatory treatment.  In this case the employee was continuing in employment so there was greater scope for a recommendation to alleviate the effects of the discrimination than if employment had terminated.

Hill v Lloyds Bank, EAT