Employers not obliged to extend sick pay entitlement for disabled employees

In the case O'Hanlon v. HM Revenue & Customs the Court of Appeal has confirmed that an employer is not obliged to continue paying sick pay to a disabled employee once sick pay entitlement has run out. Failure to do so was neither a breach of the duty to make reasonable adjustments nor unlawful disability-related discrimination.

The Claimant was disabled under the Disability Discrimination Act (DDA). The sick pay rules of her employer provided that anyone on sick leave would receive full pay for 26 weeks and half pay for 26 week in any four year period. The Claimant had lengthy absences from work and used up her sick pay entitlement. She claimed that she ought to have been given full pay for her absences, and that the failure to make such payment amounted to both disability-related discrimination and a failure to make reasonable adjustments.

Before the Court of Appeal the Claimant argued that she ought to have been paid full pay when, after the expiry of six months full pay under the employer's sick pay policy, she was absent for disability-related reasons. Previously she had argued that this should be the case whatever the reason for her absence. In addition, she argued that periods of absence for a disability-related reason should not be aggregated with periods of absence for non disability-related sickness. On this basis she argued that in any four year period she should be entitled to six months full pay and six months half pay for disability-related absence and six months full pay and six months half pay for non disability-related absence.

The Court of Appeal rejected her arguments. The only matter relied on by O'Hanlon to support her argument that a reduction from full pay after six months was discriminatory was the financial hardship she suffered. Employers could not be expected to decide whether to increase sick pay entitlement by an assessment of financial hardship and associated stress. It also confirmed the EAT's conclusions that payment for disability-related absence would act as a disincentive to return to work and that it would be difficult for an employer to distinguish between disability and non disability-related reasons. The aggregation argument failed for the same reasons.

As regards disability-related discrimination, the Court of Appeal confirmed that although O'Hanlon had been treated less favourably for a reason related to her disability, the treatment was justified.

The Court of Appeal was invited to find that a reasonable adjustment could never include making an extra payment to a disabled employee. In view of its other findings, the Court of Appeal did not need to deal with this argument. However, it did say that it saw much force in the views of the EAT that it would be a rare case indeed where an employer would have to give greater sick pay to a disabled employee as a reasonable adjustment. The most likely situation would be where the employee's absence is caused by the employer's failure to make other reasonable adjustments.