land_registryIn Land Registry -v- Houghton and others the question for the Employment Appeal Tribunal was whether a scheme designed to reward good attendance was discriminatory in respect of disabled employees.

The Land Registry operated a discretionary bonus scheme which commenced in 2012. All eligible employees were entitled to £900. However, any employee who received a formal warning in respect of sickness absence during the relevant financial year was not entitled to receive the payment.

Ms Houghton and four colleagues were all disabled pursuant to the criteria set out in the Equality Act 2010. They all had sickness absences but these were attributable to their disabilities. There was no doubt that the Land Registry had made reasonable adjustments to accommodate the employees’ disabilities. Nonetheless they were all issued with formal warnings relating to sickness. Accordingly they were all ineligible for the bonus payments. There was no discretion. Managers could determine that conduct matters would not affect entitlement to the bonus; not so for sickness absence which automatically triggered rejection.

At the employment tribunal the suggestion by the Land Registry that the link between disability and and non-payment of the bonus was too remote was rejected. On the contrary “non-payment of bonus was the consequence, result, effect or outcome of each Claimant’s disability”.

Justification is a possible defence to a claim of discrimination. There was a legitimate aim: encouraging and rewarding good performance and attendance. However the scheme was not a proportionate means of achieving the aim. The Claimants were awarded compensation for injury to feelings and the equivalent of pro-rated bonus payments.

The Employment Appeal tribunal agreed. the warning automatically disentitled the Clamants to the bonus and that was plainly sufficient to amount to unfavourable treatment. Without the disability each of the Claimants would not have run up the number of absences to trigger the warnings. the justification defence failed because of the absence of discretion and the absence of any explanation for this. the absence of discretion removed a way of taking account of any improvement in performance post-warning in circumstances where the legitimate aim of the bonus scheme was to reward good performance and attendance.