Outside view of RPC's transparent glass building.

Is the promise of a severance payment a reasonable adjustment?

07 August 2020. Published by Kelly Thomson, Partner

In this busy time, HR professionals would be forgiven for thinking that nothing beyond the realms of coronavirus is receiving any attention, however cases are still being decided and one Employment Appeal Tribunal (EAT) case, regarding employers' duties to provide reasonable adjustments for disabled employees, is worth some further consideration.

Is the promise of a severance payment a reasonable adjustment?

In the recent case of Hill v Lloyds Bank plc, the EAT confirmed that it could be, and in the circumstances of that case, that it was.

Background to the case

Mrs Hill had worked for Lloyds Bank for over 30 years. Between July 2016 and October 2017, she was signed off work with stress, which she attributed to bullying and harassment by two colleagues causing her to suffer from reactive depression.

She raised a grievance and then an appeal against one of these colleagues and neither were upheld. However, it was agreed by all parties upon her return to work that they did not want to work together, and Lloyds confirmed that they would not be required to do so. Despite this, Mrs Hill remained very anxious that in the future she may be required to work with these individuals again. As such, she sought an undertaking from Lloyds that, should there be a situation where there was no practical alternative to her having to work with these individuals, she would be offered a severance payment equivalent to a redundancy payment as an alternative. Lloyds refused to give this and would only provide "words of comfort" that she would not have to work with them.

Mrs Hill brought proceedings in an Employment Tribunal (ET) arguing that Lloyds' failure to provide the undertaking sought placed her at a substantial disadvantage in comparison to someone who was not disabled. This was because of the level of stress and worry that the thought of working with these colleagues caused Mrs Hill, manifesting itself in her physically feeling sick. The fact that Mrs Hill was disabled, and Lloyds had knowledge of this, were not points in dispute by the time of the ET final hearing. Mrs Hill was successful in her claim and awarded £7,500 in injury to feelings and the ET also made a recommendation that Lloyds give an undertaken along the lines of that requested (although this recommendation was subsequently withdrawn). 

The judgement was appealed by both parties as Mrs Hill was unhappy with the ET's decision to withdraw the recommendation of the undertaking; and Lloyds were unhappy with the decision that it had a "practice" of not offering undertakings as well as the ET's decision that it was a reasonable adjustment to commit to potentially paying a substantial severance payment to Mrs Hill at some time in the future. Lloyds' main arguments were that the decision not to offer an undertaking was a one-off decision and that the purpose of a reasonable adjustment was to keep an employee in work, whereas a commitment to a severance payment related to making a provision for Mrs Hill to leave.

The EAT findings

The EAT found that the ET was entitled to find for Mrs Hill in respect of her claim for disability discrimination based on a failure to make reasonable adjustments. Taken from the summary of the judgement, the EAT found that:

(a) on the facts, Lloyds did have a “practice” of not giving firm undertakings in circumstances like these (and, as it was a finding of fact, it was not capable of being appealed or, therefore, overturned by the EAT).

(b)  the "practice" identified in point (a) had put Mrs Hill at a substantial disadvantage in comparison with others not suffering a disability (as she suffered a level of anxiety and fear about the possibility that she would be required to work with these individuals, in the absence of an undertaking to the contrary, that a non-disabled person who had been bullied and harassed would not have);

(c) the giving of an undertaking would have alleviated this fear and therefore the disadvantage;

(d) it would have been reasonable for Lloyds to give a firm undertaking in the form requested.

Whilst there were issues in respect of the details of the undertaking that the ET had originally ordered, it was accepted by the EAT that a requirement to give an undertaking was a perfectly reasonable recommendation and, indeed, given that Mrs Hill's claim of failure to make a reasonable adjustment succeeded because this undertaking had not been given, it should be given in this case. The case was therefore referred back to the original ET in order for it to give further consideration to the terms of the undertaking. In respect of Lloyds' argument that the undertaking related to Mrs Hill leaving work as opposed to staying in work, the EAT considered that the purpose of the undertaking was to alleviate Mrs Hill anxiety so that she could remain in work, the provision of a severance was just a "back-stop" if there were to come a time when Lloyds were no longer able to continue to keep Mrs Hill and these colleagues from working together.

Observations

It is interesting to note that the ET and EAT found that giving an undertaking, as opposed to mere "words of comfort", was a reasonable adjustment notwithstanding the fact that the Claimant's grievance against her colleague (as she only raised a grievance in respect to one of the individuals) had not been upheld. This highlights the importance of employers needing to fully consider concerns being expressed by disabled employees and consider the impact on them in the present and whether provisions can be made - whether to take effect now or only if specific future events arise - which would alleviate these concerns in the present. Considering these concerns at an early stage in the process and fully engaging with employees regarding what can be done is always to be advised and might well prevent matters escalating further.

In respect of this specific case, Lloyds is obviously a large organisation and it clearly had no trouble in accommodating the request that these staff did not have to work together going forward. All three individuals worked in different offices (Mrs Hill was in Bristol, one colleague was based in Glasgow and the other in London), they were in different business units and they had not been required to work together since her return from being signed off sick. The fact that it was found that not providing the undertaking requested was a failure to make a reasonable adjustment, was likely related to the size and set up of the organisation.  This case does not therefore mean that an undertaking would necessarily be a reasonable adjustment in other circumstances, and indeed it is likely to be a rare case where such an undertaking as this would be required as it is so fact specific. Nevertheless, it is a reminder to employers to turn their minds to considering concerns in the round, including whether an undertaking could be appropriate, and to keep in mind the breadth of the reasonable adjustment obligation, once engaged.