O'Hanlon v Revenue and Customs Comrs: [2007] EWCA Civ 283

CA: Ward, Sedley and Hooper LJJ: 30 March 2007

The claimant, who suffered from clinical depression and was a disabled person for the purposes of the Disability Discrimination Act 1995, had lengthy absences from work, mainly due to her disability but some for unrelated sickness. During these absences she was paid in accordance with the employers' sick pay rules, under which an employee received full pay for a maximum of six months in any 12-month period, half pay for a further six months subject to a maximum of 12 months in any four-year period, and thereafter the pension rate of pay. The claimant made a complaint of disability discrimination, claiming both that the failure to pay her full pay for all disability related sickness amounted to disability-related discrimination under section 3A(1) of the 1995 Act and that the employers had failed in their duty under section 4A to make reasonable adjustments, to counter the disadvantage she suffered under the sick pay rules, for the purposes of section 3A(2). In relation to the claim under section 3A(1), the employment tribunal found that the claimant was not treated less favourably by the employers than others because of her disability, and that, in any event, such discrimination would have been justified, as the cost of changing the sick pay policy and the potential difficulties it would create would be excessive. The tribunal also found that, although the claimant was placed at a substantial disadvantage by the operation of the sick pay rules, the employers, in facilitating the claimant's return to work by reducing her hours and transferring her to a location where commuting would be easier, had taken reasonable steps to prevent the rules having that effect and, accordingly, were not in breach of the duty referred to in section 3A(2). The Employment Appeal Tribunal dismissed an appeal by the claimant.

The claimant appealed on the ground, inter alia, that, as a reasonable adjustment, she ought to have received full pay while absent for reasons of disability after the expiry of the six-month period and while such payment constituted a reasonable adjustment; alternatively, periods of absence for a reason of disability should not have been aggregated with periods of absence for non-disability related sickness.

The Court of Appeal held:
(1) While, for the purposes of section 3A(2), the employment tribunal had been right to accept that the employers' sick pay rules placed the claimant at a substantial disadvantage in comparison with employees who were not disabled, because its effect was that paid sick leave attributable to her disability absorbed the paid sick leave she would otherwise have been entitled to for occasional ailments, the only reason put forward, on appeal, for not applying the rules to the claimant herself was additional pressure placed on her by financial hardship feeding into her depression. It would be invidious for an employer to have to determine whether to increase sick payments, or separate periods of disability related absence from absences unrelated to disability, by assessing the financial hardship suffered by the employee, or the stress resulting from lack of money, which could equally be felt by a non-disabled person absent for a similar period.
(2) In respect of the claim for disability-related discrimination, pursuant to section 3A(1), once the tribunal had found that increasing sick pay was not an adjustment a reasonable employer would be required to make for the purposes of section 4A(1), so that the objective test for imposing the duty did not bite, the more subjective test of justification required by section 3A(3) was satisfied, given that the same failure to provide full pay lay behind both claims; and that, accordingly, the claims by reference to both section 3A(1) and (2).

The appeal was dismissed.

Appearances: Heather Williams QC and Nick Toms (Thompsons) for the claimant; Christopher Jeans QC and David Craig (Solicitor, Revenue and Customs) for the employers.