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Bonuses that are automatically withheld due to sickness record can amount to disability discrimination

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Case Update: Land Registry v Houghton and others (UKEAT/0149/14/BA)

This matter involved five Claimants who brought claims against Land Registry under s.15 of the Equality Act 2010 for non-payment of a corporate bonus. The Land Registry operated a bonus scheme which automatically excluded any employee who had received a formal warning due to sickness absence during the relevant financial year. Each of the Claimant’s had accrued sickness absence due to their disabilities. They claimed disability-related discrimination on the basis that the decision not to pay them a bonus came from something arising in consequence of their disabilities.

Reasonable adjustments had been made by The Land Registry to assist the Claimant’s in light of their disabilities including adjusting the usual trigger points at which a warning procedure for absence would become engaged. Managers had discretion whether or not to withhold bonuses following the issue of a conduct-related warning however such discretion did not apply to sickness-related warnings.

The Claimant’s won their claim of disability discrimination. The ET held that the less favourable treatment shown by the Land Registry arose as a consequence of the Claimant’s disabilities and was disproportionate to achieving the employer’s aim of rewarding good performance and attendance. The Land Registry appealed the decision.

The EAT dismissed the appeal finding that the type of warning automatically disentitled the Claimants to the bonus. This disentitlement was sufficient to amount to unfavourable treatment in consequence of the Claimant’s disabilities. The Land Registry could have avoided a finding of discrimination by giving managers discretion to decide whether or not an employee should receive a bonus in spite of their sickness absence warning.

By dispute resolution team member, Alex Banks

If you have had an issue similar to this and would like some advice please contact our discrimination team on 0345 122 8665