United Kingdom Employment Appeal Tribunal

SUMMARY

The Appellant was disabled within the meaning of the Disability Discrimination Act. The sick pay rules of her employer provided that anyone absent sick would receive full pay for 26 weeks in any 4 year period, and thereafter half pay for the next twenty six weeks, and thereafter the pension rate of pay. The Appellant had lengthy absences from work, most of which were related to her disability. She claimed that she ought to have been given full pay for her absences, alternatively for non-disability related absences, and that the failure to make such payments amounted to both disability related discrimination and involved a failure to make reasonable adjustments under sections 3A(1) and 3A(2) of the Act respectively. The Employment Tribunal found that although the effect of the sick pay rules was to subject her to a substantial disadvantage within the meaning of section 4A(1), the adjustment sought was not a reasonable one. They also found that there was no disability related discrimination, but even if there was, it was justified. The employee appealed against the three adverse findings against her and the employer cross appealed against the finding that the effect of the sick pay rules was to place her at a substantial disadvantage. The EAT found that the Employment Tribunal had erred in law in concluding that there was no disability related discrimination, but that they were entitled to find that it was justified. The cross appeal was dismissed, as was the appeal against the finding that the adjustment was not a reasonable one. Accordingly, the Employment Tribunal's conclusion that there had been no breach of the Act stood.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT):

1. This is an appeal from the unanimous decision of the Employment Tribunal sitting at Bury St Edmunds in which it rejected the Appellant's complaints of disability discrimination.
2. The case raises an issue of some importance concerning the application of sick pay policies to disabled persons.

The background

3. Mrs. O'Hanlon has been employed by the Respondents, the Commissioners for Her Majesty's Revenue & Customs, since September 1985. She has suffered from clinical depression since 1988. It is accepted that she is suffering from a disability within the meaning of the Disability Discrimination Act 1995.
4. The Appellant started to take long periods of absence from work from 2001. There is an absence of 129 working days between the 4 June and the 20 November 2001. She was allowed to return on a part time basis between the 2 December 2001 and the 18 June 2002. Thereafter, there was a further absence of 84 working days until the 31 October 2002, and a second return on a part time basis from the 1 November 2002, gradually building up to full time from the 2 December 2002. In total, in the four years prior to the 15 October 2002, Mrs O'Hanlon had a total absence of 365 days of sickness, which comprised 320 relating to her disability and 45 of unrelated days of sickness absence.
5. Thereafter, from December 2002 she was only absent for three days between December 2002 and August 2003. That was for gastro-enteritis, and then two days due to an allergic reaction.
6. There was a further period of absence from the 4 September 2003. Part of her difficulty was the commuting involved in travelling to her office in Welwyn Garden City, so the employers transferred her to Hertford with effect from the 3 February 2004. The intention was to assist her because she had found the travelling to Welwyn Garden City a significant impediment.
7. In 2004 there were certain short absences unrelated to disability, but also a period of between three and five days which were attributable to her depression.
8. The Respondent's sick pay rules are set out in a document entitled 'The Guide to Working in the Inland Revenue'. The relevant rule, as summarised by the Tribunal, was as follows:

"You may be allowed full pay for a maximum of six months in any period of 12 months; and half pay for a further maximum period of 6 months subject normally to an overriding maximum of 12 months paid sick absence in any period of 4 years. After that you may be paid your equivalent pension rate of pay, or half pay, whichever is the less, unless you have less than 2 years pensionable service in which case the absence will be unpaid."

The effect of these rules was that she was on pension rate for all absences after the 13 October 2002.

9. There are then certain modifications of that basic scheme. First, there is a specific provision which provides that in certain circumstances additional paid sick absence may be made. In total, up to 40 days' additional sick absence with full pay is permitted. The relevant conditions for this are that the employee must have taken all their paid sick absence due to long term illness or injury and then after a return to work, either fallen ill again with an unrelated and minor illness or injury, or, taken further sick absence in connection with the original illness or injury, but only for active medical treatment for debilitating side effects, for which time off work is needed.
10. In addition, the six-month limit does not apply where the employee is absent because of an assault on duty or absent because of a prescribed industrial injury or disease.
11. The Respondents also have something called Disability Adjustment Leave (DAL) which was introduced in 2003. This is not, however, intended to cover sickness absence – indeed it expressly states that it is not – but is to enable reasonable adjustments to be made in a number of specified circumstances, such as where training is necessary to help manage the effects of the disabling condition, or where necessary equipment has been ordered but not sent. The periods spent on DAL are not to be considered as part of the sickness absence.
12. In September 2004 Mrs O'Hanlon applied for an extension to her sickness absence of up to 40 days in accordance with the procedure we have outlined. The Human Resources Department of the Revenue would not grant that request on a retrospective basis, but indicated that they would allow up to 40 days paid sickness absence for future absences unrelated to the depression.
13. In February 2005 Mrs O'Hanlon, through her Trade Union representative, lodged a grievance requesting that the absences because of depression should not be included in the overall sickness absence total when calculating sick pay. That was refused essentially on the basis that it was fundamentally at odds with the scheme which the Respondent had adopted.
14. Mrs O'Hanlon subsequently lodged her claims in the Employment Tribunal. Her primary case is that she should have received full pay for all disability related sickness absences; her secondary case is that she should have received full pay for all non-disability related sickness absence. She has not specified whether she is claiming ordinary pay or sick pay, nor has she indicated for how long she is alleging that such payments should continue to be made. She contends that she is substantially disadvantaged by the sick pay rules and that the employers have failed to make a reasonable adjustment to counter that disadvantage. She also contends that she has been the subject of unjustified disability related discrimination.
15. The Respondents contended that the cost of accepting the Claimant's request and giving her full pay for such absences rather than paying her in accordance with the sick pay scheme, would have been £4,722.87. After tax and national insurance, this resulted in a net claim of £3,261.77.
16. There was also evidence from Mr Grace, which was accepted by the Tribunal, that if one looked at the likely implications across the whole of the Department and assessed the potential cost, the total cost would be just under £6 million per annum. Plainly, that kind of estimate relies upon a number of assumptions, in particular about how many of the long term ill are disabled within the meaning of the legislation, but the Tribunal expressly considered the assumptions and thought they were reliable. They concluded that the estimate had been as honest and as accurate as Mr Grace could make it. They also accepted the evidence of Mr Grace that it would often be very difficult to distinguish between those who were disabled and those who were not, and that might lead to the employers feeling obliged to make these payments even to non-disabled persons, at least in marginal cases where their status was not clear.
17. The four issues arising from these facts which the Tribunal had to determine were as follows:

"(1) Do the Respondent's rules, resulting in reduced rates of pay after 26 and 52 weeks respectively, constitute a provision, criterion or practice which places the Claimant at a substantial disadvantage in comparison with persons who are not disabled?

(2) If so, has the Respondent taken such steps as are reasonable in all the circumstances of the case in order to prevent the provision, criterion or practice having that effect?

(3) Do the reduced payments made to the Claimant when absent sick constitute less favourable treatment for a reason related to a disability?

(4) If they do, is the treatment in question justified?"

The law

18. The relevant legislation is as follows:

"4A Employers: duty to make adjustments

(1) Where –

(a) a provision, criterion or practice applied by or on behalf of an employer, or

(b) any physical feature of premises occupied by the employer

places the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the provision, criterion or practice, or feature, having that effect…."

3A Meaning of "discrimination"

(1) For the purposes of this Part a person discriminates against a disabled person if -

(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply, and

(b) he cannot show that the treatment in question is justified.

(2) For the purposes of this Part, a person also discriminates against a disabled person if he fails to comply with a duty to make reasonable adjustments imposed on him in relation to the disabled person

(3) Treatment is justified for the purposes of subsection (1) (b) if, but only if, the reason for it is both material to the circumstances of the particular case and substantial.

(4) But treatment of a disabled person cannot be justified under subsection (3) if it amounts to direct discrimination falling within subsection (5).

(5) A person directly discriminates against a disabled person if, on the ground of the disabled person's disability, he treats the disabled person less favourably than he treats or would treat a person not having that particular disability materially different from, those of the disabled person.

(6) If, in a case falling within subsection (1), a person is under a duty to make reasonable adjustments in relation to a disabled person but fails to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he complied with that duty.

18B: Reasonable adjustments: supplementary

(1) In determining whether it is reasonable for a person to have to take a particular step in order to comply with a duty to make reasonable adjustments, regard shall be had, in particular to –

(a) the extent to which taking the step would prevent the effect in relation to which the duty is imposed;

(b) the extent to which it is practicable for him to take the step;

(c) the financial and other costs which would be incurred by him in taking the step and the extent to which taking it would disrupt any of his activities;

(d) the extent of his financial and other resources

(e) the availability to him of financial or other assistance with respect to taking the step;

(f) the nature of his activities and the size of his undertaking

(2) The following are examples of steps which a person may need to take in relation to a disabled person in order to comply with a duty to make reasonable adjustments –

(3) (a) making adjustments to premises;

(b) allocating some of the disabled person's duties to another person;

(c) transferring him to fill an existing vacancy;

(d) altering his hours of working or training;

(e) assigning him to a different place of work or training;

(f) allowing him to be absent during working or training hours

for rehabilitation assessment or treatment;

(g) giving, or arranging for, training or mentoring (whether for

the disabled person or any other person);

(h) acquiring or modifying equipment;

(i) modifying instructions or reference manuals;

(j) modifying procedures for testing or assessment;

(k) providing a reader or interpreter;

(l) providing supervision or other support."

19. Some analysis of these provisions is necessary properly to understand the

arguments in this case.

Three kinds of disability discrimination

20. Section 3A identifies three kinds of disability discrimination. First, there is direct discrimination. This is the situation where someone is discriminated against because they are disabled. This particular form of discrimination mirrors that which has long been found in the area of race and sex discrimination. As with other forms of direct discrimination, such discrimination cannot be justified. Here, where all employees are subject to the same rules irrespective of their disability, there can be no basis for a claim of direct disability discrimination and none is alleged.
21. Second, there is disability related discrimination: section 3A(1). This is in some respects similar to indirect discrimination found in other discriminatory legislation, but there is no requirement here that the discrimination should have a disparate impact on the disabled as a body. It is enough that the employee is treated less favourably for a reason related to his or her particular disability. This form of discrimination can be justified. However, justification can only be established if the employer shows that the reason for the treatment is both material to the circumstance of the particular case and substantial: section 3A(3).
22. Third, there is the failure to make reasonable adjustments form of discrimination in sub-section (2). Here, the employer can be liable for failing to take positive steps to help to overcome the disadvantages resulting from the disability. However, this in only once he has a duty to make such adjustments. That duty arises where the employee is placed at a substantial disadvantage when compared with those who are not disabled.
23. There is a close relationship between these two latter forms of discrimination. Section 3A(6) provides that treatment can only be justified under sub-section (1) if it would have been justified even if the employer had complied with any duty to make reasonable adjustments. It follows that logically it makes sense to consider the question of reasonable adjustment disability discrimination first. That was made clear by Lord Rodger of Earlsferry in the case of Archibald v Fife Council [2004] ICR 954 para.32, a case which we consider below.
24. Most of the key concepts have been the subject of judicial analysis; we will analyse them before considering the Tribunal's decision.

The duty to make adjustments

25. The section 4 duty arises when a provision, practice or criterion places the disabled person at a substantial disadvantage when compared with the non-disabled. The decision of the House of Lords in Archibald v Fife Council [2004] ICR 954 identifies how the non-disabled comparator should be identified. In that case the employee had been a road sweeper with the Council. She had minor surgery which unfortunately gave rise to complications and she was virtually unable to walk and therefore could not do her job. The Council took various positive steps to seek to redeploy her, such as by retraining her and short-listing her for various posts for which she might be eligible. However even after over 100 interviews she was not appointed to an alternative post and ultimately was dismissed for failing to be able to carry out her job. She contended that the employers had failed to make reasonable adjustments, alleging that the employers ought to have relieved her of the burden of undertaking competitive interviews. The Employment Tribunal thought that section 7 of the Local Government and Housing Act 1989 precluded her being given preferential treatment in that way. She succeeded in the House of Lords, having failed in all courts below. Her dismissal was for a reason related to her disability and the employers were not justified in dismissing her unless they had carried out all reasonable adjustments as required by what is now section 4. The case was remitted to the Employment Tribunal for it to consider whether it was reasonable for the employer to have appointed her to another vacant sedentary post- even a higher grade post- without competitive interviews. The 1989 Act was no barrier to that. In the course of his speech, Lord Rodger identified the comparator as being the employees who were not disabled, could carry out the functions of their job, and therefore were not at risk of dismissal.
26. In Smith v Churchills Stairlifts PLC [2006] IRLR 41, Maurice Kay LJ considered all the judgments in Archibald and concluded that "the comparator is readily identified by the disadvantage caused by the relevant arrangements" (para. 40). On that basis, in this case the comparators are those who are not disabled and do not as a consequence have illnesses of a length which denies them the right to have full pay. (This may be because they are not ill, or not for periods which lead to a reduction in pay. The fact that comparison can be made with both indicates that it is of no great significance in this case whether it is alleged that the entitlement is to pay or sick pay, the latter referring to the pay awarded to someone still within the first twenty six weeks of absence.)
27. Once that comparison identifies a substantial disadvantage, the question whether the employer has made reasonable adjustments - and the onus will be on the employer to show this - will inevitably depend on the circumstances of the case; see e.g. the speech of Lord Rodger of Earlsferry in the Archibald case, para 43.
28. That question, however, has to be determined objectively. As we shall see, that is in striking contrast to the way in which the courts assess the question of justification with respect to disability related discrimination. In the Smith case, to which we have made reference, Maurice Kay LJ expressed the position thus (paras 44-45 but replacing the sections referred to with the modern provisions):

"There is no doubt that the test required by s.4A(1) is an objective test. The employer must take 'such steps as it is reasonable, in all the circumstances of the case …' The objective nature of the test is further illuminated by s.18B(1). Thus, in determining whether it is reasonable for an employer to have to take a particular step, regard is to be had, amongst other things, to (c ) the financial and other costs which could be incurred by the employer in taking the step and the extent to which taking it would disrupt any of his activities.'

It is significant that the concern is with the extent to which the step would disrupt any of his activities, not the extent to which the employer reasonably believes that such disruption would occur. The objective nature of this test is well established in the authorities: see Collins v Royal National theatre Board Ltd [2004] EWCA Civ 144; [2004] IRLR 395 in which Sedley LJ said (at paragraph 20):

'The test of reasonableness under s.4A … must be objective. One notes in particular that s.4A(1) speaks of "such steps as it is reasonable … for him to have to take."

His Lordship then went on to contrast this with the test for justification under section

3A(3).

29. As his Lordship pointed out, it follows that it is not inconsistent for a tribunal to conclude that certain treatment may be justified taking into account section 3A(1) in isolation, and yet constitute a breach of the duty to make reasonable adjustments under section 3A(2). (As we have said, however, the issue of justification cannot be looked at in isolation because of the effect of section 3A(6) which requires justification to be assessed only on the premise that reasonable adjustments which could have been made have been made. In practice, however, if a Tribunal concludes that no reasonable adjustments are required, we think it will be a relatively rare case for any disability related discrimination not to be justified).

Disability related discrimination

30. The approach which Tribunals must adopt when determining whether or not there is disability related discrimination was considered by the Court of Appeal in the important case of Clark v Novocold Ltd [1999] ICR 951. It is central to part of this appeal and therefore justifies detailed analysis. In that case, the employee was dismissed after he had become disabled following an accident at work. The employers were informed the likelihood was that he would be unable to resume work for about a year. The employers accepted that he was disabled within the meaning of the Disability Discrimination Act.
31. The Employment Tribunal found that there was no disability related discrimination because the employers would have treated any employee equally who had been sick for a similar length of time, whether he was disabled or not. In other words, the appropriate comparator was held to be someone absent for the same length of time, but for a reason other than disability.
32. The Employment Appeal Tribunal accepted that this was a correct approach when considering the appropriate comparator, but remitted the case on the grounds that the hypothetical comparator in this case had not been adequately identified.
33. The Court of Appeal upheld the employee's appeal and held that this was an improper construction of the section. The proper approach to determining the question of whether or not there was disability related discrimination was identified in the following way by Lord Justice Mummery (at page 961 to 962, but substituting the current statutory provisions):

"The two questions posed by the statutory provisions are: (1) Was the applicant dismissed for a reason which relates to his disability? (2) If so, did the employers treat him less favourably that they would treat others to whom that reason would not apply?

Question (1) is one of fact. It is common ground that "dismissal" is caught by section [3A(1)]: see section 4(2)(d). The finding of the industrial tribunal on the reason for dismissal is stated above. It is clear that that was a reason which related to his disability. In order to answer question (2), it is necessary to compare the employers' treatment of the applicant with the treatment of others to whom "that reason" would not apply. What is meant by "that reason?"

34. Mummery LJ then analysed the possible interpretations of "that reason" in what is now section 3A (1)(a). Did it simply mean the reason for the treatment and no more? In this case that would mean that the reason was the fact of being absent for the requisite period and thus the comparison would be with someone not absent for that period. Or did it mean the reason for the treatment but embracing the causal link to the disability? In this case that would mean that the reason was absence connected to disability and the comparison would be with those absent for the same period but for a reason not connected with any disability. The analysis is crucial. If the first interpretation is correct then there is less favourable treatment because a person not absent for the requisite period will still receive full pay. If, on the other hand, the second approach is right then there is no less favourable treatment since all absentees are treated alike (save where the absence stemmed from an accident which was work related.).
35. The Employment Tribunal and the EAT in that case had both preferred the latter interpretation. The Court of Appeal held that they were wrong to do so. Mummery LJ accepted that the term was ambiguous, but considered that it should be construed in the manner which would best give effect to the purpose of the legislation. He then continued as follows (p.963F to H):

"The result of this approach is that the reason would not apply to others even if their circumstances are different from those of the disabled person. The persons who are performing the main functions of their jobs are "others" to whom the reason for dismissal of the disabled person (that is inability to perform those functions) would not apply.

In the context of the special sense in which "discrimination" is defined in section [3A] of the Act of 1995 it is more probable that Parliament meant "that reason" to refer only to the facts constituting the reason for the treatment, and not to include within that reason the added requirement of a casual link with disability: that is more properly regarded as the cause of the reason for treatment than as in itself a reason for the treatment. This interpretation avoids the difficulties which would be encountered in many cases in seeking to identify what the appeal tribunal referred to as "the characteristics of the hypothetical comparator."

36. In the course of giving judgment, Mummery LJ also referred to an example of what the Minister in Parliament had identified as disability related discrimination in the field of the provision of services. It concerned the café owner who refuses to have any dogs in the café, including guide dogs accompanying the blind. Lord Justice Mummery demonstrated that the employer's preferred interpretation would not give such a disabled person a discrimination claim; the reason for the treatment was the fact that he had a dog, but all dog owners were similarly treated. However, the Minister envisaged that the blind man would be able to establish a case of prima facie discrimination in these circumstances i.e. discrimination which would be unlawful unless justified. That could only be on the assumption that the employee's interpretation was correct. The comparison had to be with those who did not have dogs rather than non-disabled who did have dogs but for reasons wholly unconnected with any disability.
37. This case demonstrates that the approach to disability related discrimination is, as Mummery LJ pointed out, quite different from that which applies to other forms of indirect discrimination. However, it still requires the Tribunal to find the subjective reason why the employer acted as he did; that must be a disability related reason. It is not enough that the disability was causally relevant if the actual reason was not disability related: see the decision of the Court of Appeal in Taylor v OCS Group [2006] IRLR 613 per Lady Justice Smith at paras. 72-73.

The scope of justification

38. The question of justification in the concept of disability related discrimination was considered by the Court of Appeal in Jones v Post Office [2001] ICR 814. In that case the employee was a delivery driver who suffered a heart attack and became dependent on insulin treatment. The employers had a policy about the requisite fitness standards for drivers and in accordance with that policy pleaded that he could only return to limited driving duties. The employee contended that this was disability related discrimination.
39. The Employment Tribunal found that the deterioration in the employee's condition had made no material difference to the existing risk, and that in those circumstances the employers had failed to justify the less favourable treatment. The Employment Appeal Tribunal allowed the appeal and remitted the question of justification for a re-hearing.
40. The employee appealed to the Court of Appeal, but the case was dismissed.
41. The question of the proper approach to the issue of justification was considered by Lord Justice Pill. He summarised the proper approach at paragraph 25 of the decision in the following terms:

"Upon a consideration of the wording of section [3A(3)] in context, I conclude that the employment tribunal are confined to considering whether the reason given for the less favourable treatment can properly be described as both material to the circumstances of the particular case and substantial. The less favourable treatment in the present case is the limit upon the hours of driving. The reason given for it is the risk arising from longer periods of driving. The employer obtained what are admitted to be suitably qualified and expert medical opinions. Upon the basis of those opinions the employer decided that the risk was such as to require the less favourable treatment. In order to rely on section [3A(3)] it is not enough for the employer to assert that his conduct was reasonable in a general way; he has to establish that the reason given satisfies the statutory criteria. The employer asserted in this case that the risk arising from the presence of diabetes is material to the circumstance of the particular case and is substantial. Where a properly conducted risk assessment provides a reason which is on its face both material and substantial, and is not irrational, the tribunal cannot substitute its own appraisal. The employment tribunal must consider whether the reason meets the statutory criteria; it does not have the more general power to make its own appraisal of the medical evidence and conclude that the evidence from admittedly competent medical witnesses was incorrect or make its own risk assessment".

42. Lady Justice Arden adopted a similar approach, summarising the position as follows:

"41. A tribunal faced with a claim of justification may well find it helpful to proceed by asking the following questions. What was the employee's disability? What was the discrimination by the employer in respect of the employee's disability? What was the employer's reason for treating the employee in this way? Is there a sufficient connection between the employer's reason for discrimination and the circumstances of the particular case, including those of the employer? Is that reason on examination a substantial reason?

42. The first three of those questions involve pure questions of fact. The fourth and fifth questions, however, involve questions of judgment. The latter questions may involve hearing expert evidence but the employment tribunal should not conduct an inquiry into what is the best course of action to take in all the circumstances of the case. Nor are the tribunal required to be persuaded themselves. They are not entitled to find that the employer's reason for the discrimination was not justified simply because they take the view that some conclusion, other than that to which the employer came, would have been preferable. Nor can they conclude that justification has not been shown simply because they entertain doubts as to the correctness of the employer's conclusion. If credible arguments exist to support the employer's decision, the employment tribunal may not hold that the reason for the discrimination is not "substantial". If, however, the employer's reason is outside the band of responses which a reasonable employer might have adopted, the reason would not be substantial. This test was applied by the Court of Appeal in the different context of unfair dismissal in Foley v Post Office [2000] ICR 1283. In short, so far as the second limb of section [3A(3)] of the 1995 Act is concerned, justification is shown provided that the employer's reason is supportable."

43. Accordingly there is considerable leeway afforded to employers when the issue of justification is under scrutiny, in contrast to the position where the question is whether reasonable adjustments have been made.

The Tribunal's conclusions

44. The Tribunal made certain preliminary observations before focusing on the questions we have set out.
45. First, they noted that the statutory provisions of the Code of Practice are aimed to assist disabled people to return to work or to remain at work. They are not, in general, designed to encourage people to remain away from work. In this case, as the Tribunal noted, the employers had made adjustments on three occasions to assist the return to work of this Appellant. They had twice reduced her hours so as to enable her to come back to work without facing the immediate strain of full time employment, and they changed her location so as to reduce the pressures from commuting. They also noted that it was not suggested in any way that her absence could be attributed to any failure on the part of the employer to take steps to assist her in her return to work, and they observed that although any financial pressures might be a detriment to the employee, at the same time they also amount to an incentive to return to work.
46. The Tribunal then concluded that the pay scheme did place the Claimant at a substantial disadvantage. They noted that the Revenue kept the disabled outside the unsatisfactory attendance procedure in the sense that absence by reason of disability was not treated as part of the relevant absence period. This was therefore to their advantage but nonetheless the Tribunal concluded that overall the employee was placed at a substantial disadvantage.
47. However, they went on to find that the Respondents had taken such steps as were reasonable in all the circumstances. They first identified the various steps that had been taken to assist the disabled to overcome the disadvantages resulting from their absence as follows (para 70):

"For the reasons we have set out in our preliminary comments, it seems to us that we must consider this issue in the broad context of the range of the Respondent's policies. The principal ways in which the Respondents have sought to reduce the financial disadvantages of long term absence are two fold. Firstly, they have done all they can to enable Mrs O'Hanlon to return to work so that her absences are no longer than they need to be. Secondly, they have not added to her causes of depression by the threat of any disciplinary proceedings."

48. They then further analysed the issue of reasonableness having regard to all the factors identified in section 18B as follows (paras 71- 72):

"We accept that the Respondents are entitled to have a pay policy based on the fundamental premise that employees should normally be paid for the work they do. It should not be treated as a normal obligation on an employer to pay people when they are absent from work. Once a scheme is introduced and operated which provides the benefit of full pay to those who are absent from work, it is entirely reasonable to have limits placed upon it, especially when those limits are graduated so that there is a reduction to half pay, and then a lower rate of pay, rather than a sudden absence of pay. This scheme is also reasonable in that it contains, as we have noted, provisions for the exercise of discretion in clearly defined circumstances.

It is appropriate to this point to remind ourselves of the provisions of section 18B, taking each of the relevant subparagraphs:

(a) The step proposed by Mr Toms is that for however long Mrs O'Hanlon is absent from work, she should always receive full pay. The extent to which that step would prevent the effect in relation to which the duty is imposed is a mixture. On the one hand, she would suffer no financial detriment whatsoever, but on the other hand she would have no incentive to return to work and earn her salary. We do not see that this is a desirable outcome.

(b) The extent to which it is practicable for the Respondent to take that step depends on how the cost is measured. If we restrict the cost in respect of Mrs O'Hanlon alone, then it is comfortably affordable by the Respondents. However, that is an unrealistic perspective on this factor. There would be no reason to withhold from all disabled employees the same benefit being afforded to Mrs O'Hanlon. The Respondents would have to change their pay policy, either to provide the same benefits to all disabled people; or to create an area of discretion for managers to allow some employees to have such benefits, and others not to receive them. There would therefore be the potential for animosity and a sense of unfairness as between disabled and non disabled employees.

(c) In respect of those accepted to be disabled it can be difficult, as the evidence in this case revealed, to distinguish between absence related to the disability and that no so related. There may be concurrent causes for absence or over lapping symptoms.

(d) Subparagraphs (c), (d) and (e). We run these together, in the particular circumstances of this case. Since the outcome of providing full pay to Mrs O'Hanlon for any period of time for which she is absent from work because of her disability would involve a change to the overall policy, and therefore affect a much larger group of employees, the true financial costs are those which have been put forward by the Respondents, as being in the millions of pounds, and cannot rationally be limited to the individual claim of Mrs O'Hanlon. Furthermore, an additional expenditure of that scale will clearly disrupt other activities, since inevitably, the funds to pay for it would have to come from some other part of the budget and the activities of the Respondent department. It is, of course, obvious that the financial resources of the Respondent could, in broad terms, afford such changes, and if they were necessary because of the legal obligations on the Respondent, then it would be money well spent. It is equally true that the availability of financial assistance with respect to taking this step would be one part of the overall picture of the way in which government, as a whole, distributes its expenditure.

(f) The nature of the activities of the Respondent, and the size of the undertaking, obviously provide the basis for a very large budget. However, on the evidence before us from Mr Grace, we must also take into account that at the level at which Mrs O'Hanlon works, if she is not there to do her job then someone else has to do it for her. If that position is expanded to take account of all of those who are disabled being absent from work, on full pay, then the overall effects on other employees are significant. We are bound to take into account that fact that it is government policy at present that the size and cost of the civil service should be confined, so far as possible. We should not proceed on the basis that absences will be dealt with simply by hiring in temporary staff."

49. They therefore concluded that although Mrs O'Hanlon was placed at a substantial disadvantage, the employers had made reasonable adjustments and it was not reasonable to expect them simply to pay the salary in full.
50. Then they went on to consider the alternative form of discrimination, namely whether Mrs O'Hanlon was being treated less favourably because of her disability, and they concluded that she was not. They held that the relevant question to ask in order to determine that issue was this:

"When Mrs O'Hanlon is reduced to half pay, is she being treated less favourably for a reason which relates to her disability than the employer treats others to whom that reason does not or would not apply?".

They answered it as follows:

"…her pay is being reduced because she is not at work after six months absence. She is thereby being treated in the same way as a non disabled person. The same reasoning would apply to absence 12 months away from work."...para 75).

51. They also noted that they were assisted, but did not consider themselves bound, by the decision of the EAT in London Clubs Management Ltd v Hood [2001] IRLR 719.We consider the implications of this case below.
52. They went on to conclude that if, contrary to their view, the treatment did amount to unlawful discrimination, it would have been justified in any event in the circumstances of this case, applying the concept of justification adopted by the Court of Appeal in Post Office v Jones [2001] ICR 805.. The cost of adopting this policy, and the potential difficulties it would create for employment relations, justified applying the same policy to all.

The grounds of appeal

53. The Appellant challenges all the findings of the Tribunal save for the conclusion, in her favour, that she was substantially disadvantaged so that the possibility that the employer would have to make reasonable adjustments arose. That finding is, however, the subject of the cross appeal. We will deal with the four issues as they were considered by the Employment Tribunal. Logically this requires taking the cross appeal first, and then the three issues raised on the appeal.

Was the Appellant substantially disadvantaged?

54. The employers submit in the cross appeal that Mrs O'Hanlon was treated in all respects in precisely the same way as other employees; the sick pay scheme was applied to all alike in the same manner. Accordingly, they say, there was no proper basis for saying that she suffered a substantial disadvantage. Mr Craig, counsel for the employer, further observes that it was curious for the Tribunal to find that there was no disability related discrimination and yet to find a substantial disadvantage. They should have found neither.
55. Mr Toms, counsel for Mrs O'Hanlon, contends that the argument is fundamentally misconceived and that the whole point of the section 6 duty is to recognise that there will sometimes be situations where the disabled will as a consequence of their disability be disadvantaged by general rules or policies ostensibly applicable to all. He also makes a similar observation to Mr Craig as to the apparent incompatibility of the findings on substantial disadvantage and disability related discrimination. However, whilst the employers suggest we draw the inference that the Tribunal's finding on substantial disadvantage is wrong, he contends conversely that it suggests that the finding on disability related discrimination is incorrect. He submits that there was a plain disadvantage here in financial terms, and the Tribunal could not have sensibly come to any other finding.
56. We agree with those submissions. In our judgment there is no basis for saying that the Tribunal erred in law in reaching this conclusion. It is plainly no answer to a claim of this kind to assert that the same rules apply to all. The whole premise of this provision is that the disabled employee may be disadvantaged by the application of common rules. Unlike other forms of discrimination, the employer may be obliged to take positive steps which involve treating the disabled employee more favourably than others are treated to remove or alleviate the consequences of the disability. Section 18B(3) provides many examples of the kinds of steps which may be appropriate. So in Archibald, for example, the employer had to consider taking positive steps to appoint the employee to a position for which she would not otherwise have been appointed in order to overcome the disadvantages resulting from the fact that she was not fit enough to carry out her original job. This was despite the fact that risk of dismissal facing an employee who was incapable of carrying out his or her functions was equally applicable to all staff.
57. In our view the only conceivable basis on which it could be said that the Tribunal erred in law is if it could be argued that the duty to pay money to someone absent sick from work falls out with the scope of the section 4 duty. This has a superficial attraction if only because the claim that the Disability Discrimination Act may require employers to pay the disabled more generously than other staff is at least at first blush a surprising one. However, this was a matter considered and resolved in favour of the employee by the Court of Appeal in Meikle v Nottinghamshire County Council [2005] ICR 1. We return to consider this case below in the context the Tribunal's finding on reasonable adjustment.

Did the employers make reasonable adjustments?

58. Mr Toms accepts that the Tribunal set out in some detail the reasons for their finding that it was not a reasonable adjustment. But he makes a number of detailed submissions taking issue with some of the particular matters identified by the Tribunal. For example, he says that the Tribunal were not entitled to conclude that it would sometimes be difficult to distinguish disability and non-disability absences, or that the differential treatment would be likely to sow dissension amongst the staff; that the Tribunal erred in saying that there was normally no obligation to pay sick pay for employees absent from work, it being contended that there is generally a

presumption that sick pay will be paid (Mears v Safecars Securities Ltd [1982] IRLR

183); that it was unjustified to say that making full payments would discourage a disabled employee from returning to work; and that the evidence of Mr Grace was suspect and could not properly be relied upon.

59. The Respondent contends that the Tribunal was fully entitled to refer to the matters which it did. In particular, since the purpose of adjustments is to help employees to obtain work or remain in employment, it was material to note that the proposed adjustment here would have the opposite effect and would provide a disincentive to return. The observation that giving management a discretion to determine whether an absence was disability related or not could sow dissension was plainly a proper one, and the Tribunal cannot be criticised for so commenting. It was for the Tribunal to give such weight to Mr Grace's evidence as it thought appropriate. Finally, Mr Craig submits that the Tribunal was in fact right to say that the default position is that in the absence of an express term there is no right to sick pay.
60. We reject these grounds of appeal. In our judgment these were all matters to which the Tribunal could properly have regard. The central issue went to the cost, and on the whole these matters were relatively peripheral, but they were not immaterial. The Tribunal may arguably have erred in its analysis of sick pay, but whether it did or not – and the case law on the common law right to sick pay is not entirely easy to interpret, and it is in particular far from clear that there is a right to full pay indefinitely - it plainly had only the most marginal impact on the Tribunal's analysis. The question of whether any reasonable adjustment was required over and above what had already been provided depends on an objective assessment of what could be done to ameliorate the disadvantage in fact created. The fact - if it be a fact - that there would have been no disadvantage if the common law rules had applied does not assist in that analysis. The Tribunal had to deal with the case before it, focusing on the sick pay rules which did in fact create a disadvantage.
61. The argument that the Tribunal was not entitled to rely on the evidence of Mr Grace is in our view hopeless. The Tribunal observed that Mr Grace himself recognised certain limitations in his evidence, but they were fully entitled to accept that evidence as reliable and providing them with some, albeit inevitably general, information about the cost implications of the Appellant's argument.

Two broader challenges

62. Apart from these detailed points, Mr Toms made two broader challenges to the Tribunal's analysis. First, he contended that the Tribunal should only have focussed on the particular needs of this employee. Accordingly, his original submission was that the wider cost implications had effectively to be ignored. The financial implications for Mrs O'Hanlon should have been considered quite independently of any other similar claims which might follow a successful challenge.
63. Subsequently Mr Toms modified his argument and accepted that it is in principle appropriate for an employer, faced with a claim of this kind, to have regard to the cost of applying the policy across the board. But he submitted that even if there is a proper justification for adopting such a policy as a general rule, it would still be necessary in each case to consider the individual circumstances. He contended that this was not done on this occasion; the employer merely said that its policy precluded the payment claimed, and no further particularised assessment was made. He suggested, for example, that the employers ought to have considered how long the anticipated absence might be (on the assumption that it would be more justified to make a payment if the prognosis was for a long absence); what hardship the employee was suffering as a result of the reduction in pay; and whether this might have been causing any additional stress.
64. We accept of course that in the usual case the focus must be on the particular disability and the steps taken to alleviate the disadvantages to the individual. But that is because each case is generally unique. The adjustments depend on the particular way in which the disability manifests itself. Here it is plain that the case advanced before the employer was that the policy was unjust to the disabled (or at least those who would have to take disability related sickness absences). It was suggested that she would suffer hardship as a result of the reduction in pay, but it was not alleged that she was in any essentially different position to others who were absent because of disability related sickness. In these circumstances, where the employers responded to the claim as it was advanced, it would be quite unjust and unrealistic to say that the employers should now be found to have failed to establish justification because they did not have regard to other unstated factors relating to this Appellant. In any event, it seems to us that it would be wholly invidious for an employer to have to determine whether to increase sick payments by assessing the financial hardship suffered by the employee, or the stress resulting from lack of money - stress which no doubt would be equally felt by a non-disabled person absent for a similar period.
65. His second broad objection to the decision was his submission that the Tribunal focused only on part of his case. He had put his case in two ways; first, his primary case was that the employers should disregard Mrs O'Hanlon's disability and pay in full for all sickness absences. Alternatively, he argued that they should separate out the disability and non-disability related absences and pay in full for the latter only (unless, presumably, the length of absences exceeded the limits for full pay even when considered on their own). He says that whilst the Tribunal originally noted that the case had been put in the alternative, in fact they never did address this alternative issue, except to comment that it might be difficult to separate out the two types of sickness absence.
66. We accept that the Tribunal has not in terms dealt with this alternative argument. Had we any doubts as to how it would be resolved, it would be appropriate for us to send it back to the Tribunal for further consideration and reasons. But we have no such doubts. It is true that the cost of this method of adjustment would be likely to be less overall, but in our view the basic objections which the Tribunal had to the principal claim would apply equally here. Moreover, it is difficult to see the rationale behind this way of formulating the claim. Why, we ask rhetorically, should it be consistent with the principles of the legislation to allow the non-disability related absence to be treated more favourably than the disability related absence?

Discussion: is the claim for enhanced sick pay ever sustainable?

67. In our view, it will be a very rare case indeed where the adjustment said to be applicable here, that is merely giving higher sick pay than would be payable to a non-disabled person who in general does not suffer the same disability related absences, would be considered necessary as a reasonable adjustment. We do not believe that the legislation has perceived this as an appropriate adjustment, although we do not rule out the possibility that it could be in exceptional circumstances. We say this for two reasons in particular.
68. First, the implications of this argument are that Tribunals would have to usurp the management function of the employer, deciding whether employers were financially able to meet the costs of modifying their policies by making these enhanced payments. Of course we recognise that Tribunals will often have to have regard to financial factors and the financial standing of the employer, and indeed section 18B(1) requires that they should. But there is a very significant difference between doing that with regard to a single claim, turning on its own facts, where the cost is perforce relatively limited, and a claim which if successful will inevitably apply to many others and will have very significant financial as well as policy implications for the employer. On what basis can the Tribunal decide whether the claims of the disabled to receive more generous sick pay should override other demands on the business which are difficult to compare and which perforce the Tribunal will know precious little about? The Tribunals would be entering into a form of wage fixing for the disabled sick.
69. Second, as the Tribunal pointed out, the purpose of this legislation is to assist the disabled to obtain employment and to integrate them into the workforce. All the examples given in section 18B(3) are of this nature. True, they are stated to be examples of reasonable adjustments only and are not to be taken as exhaustive of what might be reasonable in any particular case, but none of them suggests that it will ever be necessary simply to put more money into the wage packet of the disabled. The Act is designed to recognise the dignity of the disabled and to require modifications which will enable them to play a full part in the world of work, important and laudable aims. It is not to treat them as objects of charity which, as the Tribunal pointed out, may in fact sometimes and for some people tend to act as a positive disincentive to return to work.
70. Mr Toms relied upon the Meikle case, to which we have made reference, in support of his case that payments are appropriate. But in fact a careful analysis of that case suggests that it is, if anything, at odds with his claim. The claimant was a teacher who suffered from deteriorating vision. The employers were asked to make various adjustments to accommodate her difficulties, such as providing enlarged written materials and providing her with more non-contact hours to enable her properly to prepare her classes, but they failed to do so. She was absent for lengthy periods because of eyestrain and was suspended because of these absences. She was put on half pay because, as in this case, the policy of the employers was to reduce the pay after a certain length of sickness absence. She claimed, amongst other matters, that the failure to keep paying her full pay when she was absent sick constituted a failure to make a reasonable adjustment and therefore constituted a breach of the Disability Discrimination Act.
71. It is however, important in our view to see exactly how her case was put to the Tribunal, as summarised by Keene LJ in the Court of Appeal (para 55):

"In the present case Mrs Meikle claimed that the reduction in sickness benefit to half-pay because of her absence from work amounted to both forms of disability discrimination. The cause of her absence from work was the employer's failure to make reasonable adjustments and the placing of her on half-pay put her at a substantial disadvantage. A reasonable adjustment then would have been to retain her on full pay, by way of sickness benefit, but the employer failed to comply with its section 4A duty and made no such adjustments. That was unjustified and so there was section 3A(2) type discrimination. In addition, there was "direct" section 3A(1) discrimination, in that putting her on half-pay was less favourable treatment for a disability related reason, and this was unjustified".

(We have substituted the current statutory provisions, and note that when this decision was reached a failure to make reasonable adjustments could be justified, but that is no longer the case.)

72. The Employment Tribunal held that there could be no such discrimination because the payment of sick pay fell outside the scope of section 6 (now section 4) by virtue of section 6(11) (now 4(11)). It is not necessary to rehearse the arguments about that subsection. Suffice it to say that the Court of Appeal agreed with the EAT that this was a misconstruction of that sub-section; it did not apply to payments made directly from the employer to the employee. Accordingly, reasonable adjustments had to be made even where the effect of failing to do so was to affect the level of sick pay.
73. The EAT had upheld the appeal. The employers conceded that the reduction to half pay constituted less favourable treatment by reason of her disability. The question was whether it was justified. Because of what is now section 3A(6), that had to be considered on the assumption that any relevant reasonable adjustments had been made. Had they been made in this case, Mrs Meikle would not have been absent for anything like as long as she was and the reduction in pay would not have occurred. Accordingly, the EAT held that the employers were not justified in reducing the pay to half pay. The Court of Appeal agreed with this analysis. (Query whether an alternative analysis might have been that there was a failure to make reasonable adjustments and the loss flowing from that breach was the loss of pay flowing from the fact that she was absent sick.)
74. It is important to note, however, that the Court did not find that the payment of full pay was a reasonable adjustment independently of the other specific adjustments which ought to have been made and would have resulted in the employee returning to work without having to take such lengthy absences. It was never suggested that the adjustment lay simply in granting full pay. Liability arose because of the failure to make reasonable adjustments to accommodate her back into the classroom. This had the knock-on effect of rendering the failure to give her full pay unjustified. Admittedly there was no express finding that the case could not have been put in that way, but it was not even suggested that this might have been a more straightforward route.
75. For all these various reasons, in our view the Tribunal's decision on this aspect did not display any material error of law, and this part of the appeal fails.

Was there disability related discrimination?

76. The Tribunal found that there was no disability related discrimination, again essentially because all employees were treated alike.
77. The Respondent submits that the Tribunal reached the correct conclusion which was entirely in accordance with London Clubs Management Ltd v Hood [2001] IRLR 719, a decision on which it heavily relies. In that case the payment of sick pay was discretionary. The employer was faced with a high level of sick pay absence and chose to exercise the discretion so as not to pay sick pay to anyone. The employee was absent with cluster headaches which it was accepted were related to his disability. He claimed that he had been subject to unlawful disability related discrimination. The Employment Tribunal found that he had been so discriminated against, but the EAT disagreed. However, this conclusion turned on a very narrow point relating to how the case had been pleaded.
78. The Employment Tribunal had concluded that there was a prima facie case of disability related discrimination because the employee was being treated less favourably than those not suffering from the disability who were not off sick and received full pay. The EAT held that this was wrong because the claim had never been for ordinary pay but for sick pay. The question which the Tribunal ought to have asked itself was whether the employee was denied sick pay for a reason related to his disability. The EAT concluded that had that question been asked, there was only one possible answer, namely that it had nothing to do with his disability at all. The reasoning of the EAT (Ms Recorder Elizabeth Slade QC) at para 16 was as follows:

"If the tribunal had asked the correct question, was Mr Hood refused sick pay for a reason related to his disability, on the facts found by it in paragraph 9 of its decision the only conclusion open to it would have been that the reason for the treatment was the application of the policy on sick pay. That reason does not relate to Mr Hood's disability. Accordingly, the finding that LCM unlawfully discriminated against Mr Hood under [s.3A(1)] of the Disability Discrimination Act 1995 cannot stand. Because of the view that we take of the outcome of applying the correct question to the facts as found by the tribunal, a finding of discrimination under [s.3A(1)] would be perverse." (Section numbers as now amended).

79. The Respondent relies strongly on this case and says that this applies equally here, as the Employment Tribunal found. The only reason the Appellant received what she did was because this was the effect of the sick pay policy. That was not related to her disability; it was not the disability related absence which caused the loss of pay but rather the policy of reducing pay after a particular period of illness absence. Were it otherwise, employers would be obliged to make what would effectively be "disability pay" to all disabled employees. Indeed, Mr Craig for the Respondent says that if the Appellant were right, it is misleading for her to suggest that she is seeking some modification of the sick pay scheme at all. Rather, she is claiming full pay for a period when she is not at work, at least provided the illness causing her absence to trigger the reduction in pay is disability related.
80. The Appellant does not dispute that she is effectively claiming full pay for the periods when she is not at work. But she says that on a proper analysis of the authorities it is plain that she suffered less favourable treatment for a reason related to her disability. Her case was different to that in London Clubs because she was claiming ordinary pay or sick pay in the alternative.
81. We do not dispute the correctness of the decision in London Clubs but it is a case which turns on the very narrow point indeed, namely that the claim was for sick pay, and it has no application where the claim, as here, is for pay, or alternatively for sick pay which is the equivalent to full pay (as it is here for the first twenty six weeks.). If the claim is for sick pay but no such pay is awarded to anyone, then the employee is not at a financial disadvantage as a result of being sick at all. The reason for the refusal to pay sick pay is not then the fact that the employee is absent sick; indeed, that would be a condition precedent to obtaining sick pay. Rather the reason is that the employer pays no-one sick pay when absent sick. That we think is what Ms Recorder Slade meant when she said that it was the employer's policy which was the reason for the non payment of sick pay. That policy itself was not disability related and therefore the classification of the issue in dispute effectively determined the outcome of the case.
82. We have no doubt that the analysis in London Clubs cannot run when the claim is for ordinary pay, or indeed sick pay where full pay is given for a period of sickness. The decision of the Court of Appeal in Clark v Novacold then requires a comparison with someone who has not had the disability related sickness absence. Such a person would not have suffered the loss of pay since he would not have been absent for over twenty six weeks. It was the disability related sickness absence which took the Appellant over the sick pay threshold.
83. We think it is clear from the question which the Tribunal posed to itself and answered in the manner we have set out in para.50 above, that they fell into the trap of comparing the claimant with a non-disabled person also absent for the same length of time, rather than someone who would not have been absent at all. In so far as they were influenced by the London Clubs case they failed to recognise that it turned on its own unusual facts and ought not to have been followed in the very different circumstances of this case.
84. Furthermore, in such circumstances it is simply no answer at all for the employer to say, as he does in this case, that it was the policy rather than the disability which caused the difference in treatment. It obfuscates the real reason for the treatment simply to assert that it is the application of a policy. A policy is not an abstraction, disembodied from or independent of the rules or conditions of which it is comprised. When an employer says that he is acting in a particular way because that is what a policy requires, this is simply shorthand for referring to the particular rule or condition which dictates his response once relevant facts have been established. The issue is why subjectively he did what he did: see OCS v Taylor [2006] IRLR 613. In this case the reason for cutting pay is the fact that the employee is absent for 26 (and then 52) weeks. It cannot seriously be disputed that the absence was disability related and the reason was therefore a disability related reason.
85. Rules of such a kind are almost universally adopted as a policy because in general it is good industrial relations practice to apply rules equally to all and, as we have said, such equal application defeats any direct discrimination claim. But in this case it is the 26 week absence which, at the first stage, causes the reduction in pay. That is the reason for the reduction, not the policy; that merely dictates what is to happen once the relevant absence is established. Were the employer's case correct then it would mean that whenever an employer had adopted a policy, he could avoid potential discrimination of this kind by asserting (which would be true) that the reason for the disputed treatment was the application of a policy and not the existence of the set of facts which caused the policy to bite in the particular case.
86. We do not see, for example, why the café owner who says "no dogs allowed" could not equally say that he was applying his policy and that it was this non-disability related policy which was the reason he acted as he did rather than the fact that the person had a dog. Yet it is plain from the Novacold case that there is disability related discrimination if the reason why the person has a dog is related to his disability.
87. It follows that in our judgment that this aspect of the appeal succeeds. There is what might be termed prima facie disability related discrimination and the only question therefore is whether it can be justified.

Justification

88. Finally it is said that the Tribunal erred in finding that it was justified for the Employer to fail to pay the full salary in circumstances where it was the disability related sickness which caused the absence from work. The Appellant submits that there was no proper finding that the reason given, relating as it did to the overall financial position, was material to the circumstances of the particular case, as subsection 3A(3) requires. She also repeated the arguments here about the evidence of Mr Grace being unreliable. The employers contend that the provisions of the statute are plainly satisfied.
89. We agree. The challenge to the Tribunal's finding on justification was effectively doomed to fail once the Tribunal found that increasing sick pay was not in the circumstances an adjustment a reasonable employer would be required to make. If the objective test for imposing the duty did not bite, then there was never any real possibility that the more subjective test of justification would not be satisfied. That is not inevitably so in all cases, but in our view it is here where the same failure to make full pay lies directly behind both discrimination claims.
90. We have found that the Tribunal was right to find that there was no reasonable adjustment which could be made to the level of sick pay and therefore the question of justification has to be assessed on that basis. As we have noted, the Tribunal found that there were powerful economic reasons for the rule adopted. It would cost a very significant sum to pay full pay to all disabled employees absent sick in circumstances where their pay would otherwise be reduced. That must be a basis for a reasonable employer taking the view that, in line with the Jones case, there was a material and substantial reason for the discrimination. We do not accept that this reason is not material to the particular case, essentially for reasons we have given. Here the particular case was essentially representative of many, and therefore the impact on those other cases was a highly material consideration.
91. We would only add that in any event we think that the justification could simply be the fact that the employer considered it appropriate to pay those who attend work and contribute to the operation more than those whose absence prevents that. It would not be possible in our judgment to say that an employer could not properly consider this to be a substantial reason justifying the difference in treatment. The Tribunal seems to us to be saying as much in para 71 of its judgment, reproduced in para. 47 above.

Conclusions

92. Although we agree with the Appellant that the Tribunal did err in finding that there was no disability related discrimination, the conclusion that any such discrimination was justified was in our view manifestly open to the Tribunal. Indeed, the contrary view might well have been perverse. Equally, we find that the Tribunal was entitled to find that a reasonable adjustment did not require any increase in sick pay. It follows that the decision of the Tribunal stands.