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Withholding bonuses may constitute disability related discrimination

05 March 2015 #Employment


It is important when deciding the criteria for bonus entitlement or when scoring employees during a redundancy exercise, that due consideration is given to whether  an employee has been absent from work due to their disability.

In Land Registry v Ms Houghton and others UKEAT/0149/14/BA, Ms Houghton and four of her colleagues brought claims for disability related discrimination. They had been denied a bonus by their employer by virtue of the fact that they had received formal warnings in respect of their sickness absence. The bonuses were intended to reward good performance and attendance but once an employee received a formal warning for sickness absence, they were automatically ineligible for the bonus payment.

It was found during the hearing that each claimant had a number of sickness absences, each absence attributable to each employee’s disability.

The employer sought to challenge on appeal to the Employment Appeal Tribunal (“the EAT”) that although discriminatory in nature, the scheme rewarded good performance and attendance and could therefore be objectively justified. The EAT was not convinced by this argument and held that the employer could have eliminated the discriminatory impact of the bonus scheme by giving managers the discretion to decide whether the employee should receive their bonus, in spite of their sickness absence warning.

This case acts as a reminder for employers to review bonus scheme criteria to determine whether it has a potentially discriminatory effect on disabled employees. In the above case, the employer relied too heavily on its systems in identifying who was and was not entitled to a bonus. It is clear that had the managers been able to exercise discretion in identifying who was eligible for the bonus, this case would have been avoided.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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Kate Walsh

Kate Walsh
Senior Solicitor

E: kwalsh@clarkslegal.com
T: 0118 960 4692
M: 07776 305 578

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