UK: Disability discrimination - automatic non-payment of bonus to employees with absence warning was unlawful

Employers should review bonus or other schemes designed to reward good attendance levels, to assess whether any discriminatory affect against disabled employees can be justified.

In Land Registry v Houghton, the aim of an employer's bonus scheme was to reward good performance and attendance. However, it automatically excluded from an award those who had received a formal warning in respect of sickness absence (regardless of any improvement in attendance post warning). In contrast, managers were given a discretion whether to exclude employees who had received a warning for misconduct.

The claimants had high absence levels due to disability-related illness. The employer had adjusted the usual trigger points for absence warnings for the disabled claimants, and the warnings themselves were not unlawful. However, the automatic exclusion from the bonus scheme because of the warnings was clearly less favourable treatment in consequence of disability. It was not justified given the lack of discretion (compared with the position for misconduct warnings) and failure to reward improved attendance post-warning. The automatic exclusion from bonus was unlawful, notwithstanding the fact that the warnings themselves were not unlawful. It was no defence that the member of HR who disallowed the bonus because of the warning was unaware of the claimants’ disability.