Call us today 0115 9100 200

Linking bonuses to sickness absence records: danger of disability discrimination

Earlier this month, the Employment Appeal Tribunal (EAT) decided, in the case of Land Registry v Houghton, that the non-payment of bonuses due to employees having received a formal warning for disability-related sickness absence was disability discrimination.

The employer’s justification defence, that its bonus scheme had the legitimate aim of rewarding good attendance, did not succeed because:

  • the employees were made automatically ineligible as a result of receiving the warning: there was no element of managerial discretion in the matter, which was at odds with the fact that managers had discretion to ignore warnings related to conduct when determining bonus entitlements
  • some of the Claimants had improved their absence record after having received such warnings, which could not be taken into account under the scheme.

The EAT considered irrelevant the fact that the employer had otherwise complied with its duty to make reasonable adjustments and that the HR staff member who carried out the administrative task of linking the warning to the non-payment of bonuses did so without knowledge of the Claimants’ disabilities.

The employer was therefore ordered to pay compensation to the Claimants for injury to feelings, as well as awarding the bonuses. Employers can avoid this financial risk by reviewing company bonus schemes to remove any automatic ineligibility as a result of disability-related factors.

For more information on this or any employment law issue, please contact a member of our employment team.

Posted on February 27, 2015

This website uses cookies to enhance your browsing experience...

More information I understand