Employment Cases Update

Royal Bank of Scotland v Ashton UKEAT/0542/09/LA

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Date published: 23/01/2011

Appeal against a finding that the respondent had failed to comply with the Disability Discrimination Act 1995 by not making reasonable adjustments for a disabled employee and subjecting her to less favourable treatment than a non-disabled comparator. Appeal allowed and ET judgment reversed.

The claimant suffered from repetitive and debilitating migraine which caused her to have frequent, though intermittent, periods of absence from work. Up until 2008 she was paid sick pay at full pay, but then the respondent decided to enact the terms of the sickness policy which said that the employee would face a disciplinary warning and hearing if their sickness record reached a certain 'trigger' point. The claimant's trigger point was far higher than that of other employees because of the nature of her disability. The upshot of the disciplinary was that the claimant was not paid sick pay during the period of her disciplinary warning of 12 months. The claimant complained that the respondent was in breach of its duties to her under the Disability Discrimination Act by failing to make reasonable adjustments and discriminating against her for a disability related reason. The Tribunal ruled that the respondent had failed to make reasonable adjustments because they had failed to exercise their discretion within the policy in making the decision to give a disciplinary warning. They then considered a comparator employee, that is one who was not disabled and who had been off work for a  similar amount of time as the claimant but who had not been subject to disciplinary procedures, and concluded that the claimant had been subject to less favourable treatment.

The EAT were particularly critical of the Tribunal in this case. First, they had chosen an employee as the non-disabled comparator, but she was in fact disabled, and even if she had been properly regarded as non-disabled, she was not in the same relevant circumstances as the claimant. Secondly, the very fact that the respondent had given the claimant the advantage which was not given to non-disabled people, of having her trigger points flexed so that she received more time absent without discipline and therefore more pay during periods of absence than a non-disabled person, meant that there was no failure to make reasonable adjustments.

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Appeal No. UKEAT/0542/09/LA

UKEAT/0306/10/LA

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 15 & 16 December 2010

Before

THE HONOURABLE MR JUSTICE LANGSTAFF

DR B V FITZGERALD MBE LLD FRSA

MR B R GIBBS

THE ROYAL BANK OF SCOTLAND (APPELLANT)

MISS L ASHTON (RESPONDENT)

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant
MR THOMAS LINDEN (One of Her Majesty's Counsel)

Instructed by:
Messrs Brodies LLP
15 Atholl Crescent
Edinburgh
EH3 8HA

For the Respondent
MR GARY MORTON (of Counsel)

Instructed by:
Messrs Thompsons Solicitors
23 Princes Street
Manchester
M2 4ER

SUMMARY

DISABILITY DISCRIMINATION

Disability related discrimination

Direct disability discrimination

An Employment Tribunal failed to focus on the wording of the Disability Discrimination Act 1995 in concluding there had been no reasonable adjustment when the employer failed further to extend the benefits of the sick pay scheme to her, when they were already well beyond that which the evidence showed was given to non disabled employees when sick. The ET had approached it as if a claim for unfair dismissal, when the employer's reasons would be relevant, whereas "reasonable adjustment" is to be judged by the result, not the process by which it is reached. Comprehensive errors of approach, law and fact pervaded the ET's approach.

THE HONOURABLE MR JUSTICE LANGSTAFF

Introduction

1. This is an appeal in a case involving disability discrimination. It relates to discrimination under the law which was applicable at the date of the decision, that is the Disability Discrimination Act 1995 as amended by the Disability Discrimination Act 1995 (Amendment) Regulations 2003 SI 2003/1673 with effect from 1 October 2004. Our consideration is of these provisions only. Any wider applicability of the principles which we have set out to the law as it now is must not be too readily assumed.

2. The Act demands an intense focus by an Employment Tribunal on the words of the statute. The focus is on what those words require. What must be avoided by a Tribunal is a general discourse as to the way in which an employer has treated an employee generally or (save except in certain specific circumstances) as to the thought processes which that employer has gone through. Those may be relevant, though only to the extent necessary, to answer "the reason why" question (see cases such as Shamoon v Chief Constable of the Royal Ulster Constabulary, House of Lords [2003] UKHL 11 and Chief Constable of West Yorkshire v Khan [2001] ICR 1065 in this and other fields of discrimination where direct discrimination is in play) or, it may be, where the reasons for disability related discrimination are in play or as to the reasons for dismissal in a case in which section 98 of the Employment Rights Act 1996 falls to be applied. A focus on the words and requirements of the Disability Discrimination Act 1995 will show that the thought processes an employer has gone through are unlikely to be relevant in all but some unusual cases where what is in issue is the question of reasonable adjustment.

3. Guidance as to these provisions, the difficulty of which has been recognised in more than one case, is given by a number of authorities. An Employment Tribunal must always remain mindful of the caution issued by Lord Bingham of Cornhill at paragraph 5 of his speech in Lewisham London Borough Council v Malcolm [2008] 1 AC 1399, [2008] UKHL 43 where he noted that there were dangers in formulating lists of questions to be asked in situations revealed by one case since questions which are apposite in one case may be inapposite in another, and a jurisprudence may grow up around the terms of the questions when attention should be concentrated on the meaning and effect of the legislative text in question.

4. The employer here appeals a decision of an Employment Tribunal at Manchester, delivered on 7 October 2009, and in a separately but conjoined appeal the decision of a subsequent remedies hearing. That Tribunal upheld claims that the Appellant employer, the Royal Bank of Scotland, whom we shall call RBS, discriminated against the employee, the Respondent, by its failure to make reasonable adjustments for her being disabled (as she was accepted to be by the time the matter came for hearing), by discrimination related to her disability and in respect of a claim which she had for unpaid wages.

The Law

5. The focus being, as we have said, on the statutory provisions and their proper application, we shall set out the law at the start of this judgment. Section 3A of the 1995 Act, headed: "Meaning of 'discrimination'" reads, so far as material, as follows:

"(1) For the purposes of this Part, a person discriminates against a disabled person if

(a) for a reason which relates to the disabled persons disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and

(b) he cannot show that the treatment in question is justified.

(2) For the purposes of this Part, a person also discriminates against a disabled person if he fails to comply with a duty to make reasonable adjustments imposed on him in relation to the disabled person; "

6. Those were the two types of discrimination with which this appeal is concerned. Subsection (3) provides that:

"Treatment is justified for the purposes of subsection 1(b) if, but only if, the reason for it is both material to the circumstances of the particular case and substantial."

7. Subsection (6) provides that:

"If, in a case falling within subsection (1), a person is under a duty to make reasonable adjustments in relation to a disabled person but fails to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he had complied with that duty."

Direct discrimination is provided for by 3A(5). This appeal is not concerned with any allegation of such discrimination.

8. Pausing there before we turn to section 4A, a focus upon the words of section 3A(1) shows that what a Tribunal must be satisfied of is firstly that there has been less favourable treatment for a reason which relates to the disability and, secondly, as part of that, that that is less favourable than the way in which the employer in a case such as this treats or would treat others to whom that reason does not or would not apply. The section also involves the question of justification. The wording of section 3A(3) shows that if the reason for the treatment is material and substantial then, subject to subsection 6 in a case such as this, there is justification.

9. The question of the appropriate comparison by which to measure treatment as being less favourable was dealt with in the case of Malcolm to which we have already referred. Put broadly, that case is authority for the proposition that the proper comparator in a case in which disability related discrimination is alleged is someone who is in the same relevant circumstances as the Claimant but who has no disability. In that case, therefore, which related to the subletting of local authority premises by a tenant who suffered from schizophrenia the proper comparison was with what would happen to a tenant of the local authority who sublet premises but was not so suffering.

10. Section 4A makes further provisions about the duty to which section 3A(2) refers. It is headed: "Employers: duty to make adjustments". It reads, so far as material:

"(1) Where -

(a) a provision, criterion or practice applied by or on behalf of an employer […]

places the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the provision, criterion or practice […] having that effect."

The other provisions of section 4A are not material to this appeal.

11. Section 18B, however, is. That is headed "Reasonable adjustments: supplementary." It provides:

"(1) In determining whether it is reasonable for a person to have to take a particular step in order to comply with a duty to make reasonable adjustments, regard shall be had, in particular, to

(a) the extent to which taking the step would prevent the effect in relation to which the duty is imposed;

(b) the extent to which it is practicable for him to take the step;

(c) the financial and other costs which would be incurred by him in taking the step and the extent to which taking it would disrupt any of his activities;

(d) the extent of his financial and other resources;

(e) the availability to him of financial or other assistance with respect to taking the step;

(f) the nature of his activities and the size of his undertaking;

(g) where the step would be taken in relation to a private household, the extent of which taking it would

(i) disrupt that household, or

(ii) disturb any person residing there."

It should be noted that the list is not a complete list but it does describe those features to which particular regard should be had.

"(2) The following are examples of steps which a person may need to take in relation to a disabled person in order to comply with a duty to make reasonable adjustments

(a) making adjustments to premises;

(b) allocating some of the disabled person's duties to another person;

(c) transferring him to fill an existing vacancy;

(d) altering his hours of working or training;

(e) assigning him to a different place of work or training;

(f) allowing him to be absent during working or training hours for rehabilitation, assessment or treatment;

(g) giving, or arranging for, training or mentoring (whether for the disabled person or any other person);

(h) acquiring or modifying equipment;

(i) modifying instructions or reference manuals;

(j) modifying procedures for testing or assessment;

(k) providing a reader or interpreter;

(l) providing supervision or other support."

The remaining provisions of section 18B are not in play in this appeal.

12. Mr Linden QC, who appears for RBS, submits that these provisions show clearly that the steps which are required of an employer are practical steps. They are intended to help the disabled person concerned to overcome the adverse effects of the relevant disabilities, at least to the greatest extent possible, so that he or she may fulfil a useful role as an employee. We accept that, as both he and Mr Morton for the Respondent submits, the focus of the provisions as to adjustment requires a Tribunal to have a view of the potential effect of the adjustment contended for. The approach is an objective one.

13. It follows, says Mr Linden, and we accept, that it is irrelevant to the questions whether there has been or whether there could be a reasonable adjustment or not what an employer may or may not have thought in the process of coming to a decision as to whatever adjustment might or might not be made. It does not matter what process the employer may have adopted to reach that conclusion. What does matter is the practical effect of the measures concerned.

14. A close focus upon the wording of 3A(2), 4A and 18B shows that an Employment Tribunal - in order to uphold a claim that there has been a breach of the duty to make reasonable adjustments and, thus, discrimination - must be satisfied that there is a provision, criterion or practice which has placed the disabled person concerned not simply at some disadvantage viewed generally, but at a disadvantage which is substantial and which is not to be viewed generally but to be viewed in comparison with persons who are not disabled.

15. The duty, given that disadvantage and the fact that it is substantial are both identified, is to take such steps as are reasonable to prevent the provision, criterion or practice (which will, of course, have been identified for this purpose) having the proscribed effect - that is the effect of creating that disadvantage when compared to those who are not disabled. It is not, therefore, a section which obliges an employer to take reasonable steps to assist a disabled person or to help the disabled person overcome the effects of their disability, except insofar as the terms to which we have referred permit it.

16. The fact that this requires in particular the identification of the provision, criterion or practice concerned and the precise nature of the disadvantage which it creates by comparison with those who are non disabled, was set out clearly by this Tribunal in Environment Agency v Rowan [2008] ICR 218 at paragraph 27. That guidance is worth restating:

"[…] an Employment Tribunal considering a claim that an employer has discriminated against an employee pursuant to Section 3A(2) of the Act by failing to comply with Section 4A duty must identify:

(a) the provision, criterion or practice applied by or on behalf of an employer, or

(b) the physical feature of premises occupied by the employer (that, of course, is not relevant to the present case),

(c) the identity of non disabled comparators (where appropriate) and

(d) the nature and extent of the substantial disadvantage suffered by the Claimant."

Later in the same paragraph the Tribunal continues to say:

"In our opinion an Employment Tribunal cannot properly make findings of a failure to make reasonable adjustments under Sections 3A(2) and 4A(1) without going through that process. Unless the Employment Tribunal has identified the four matters we have set out above ….."

We interpose to say that of course it is not in every case that all four matters need to be identified but certainly what must be identified is (a) and (d). For the purpose of the comparison the Tribunal must be able to identify the persons by reference to whom the provision, criterion or practice, either in its presence or its application, is said to place the disabled person concerned at a substantial disadvantage. Disadvantage is necessarily relative. We continue with the paragraph from Rowan:

"…..it cannot go on to judge if any proposed adjustment is reasonable. It is simply unable to say what adjustments were reasonable to prevent the provision, criterion or practice, or feature, placing the disabled person concerned at a substantial disadvantage."

17. Those words were adopted as representing the proper approach to applying the wording of the statute by this Tribunal under the presidency of Cox J in Fareham College Corporation v Walters [2009] IRLR 991 at paragraph 55. The particular focus at paragraphs 56 and immediately thereafter were the words in sub-paragraph (c). Cox J said:

"The Tribunal was enjoined to specify the identity of non disabled comparators where appropriate to do so."

Those words giving a clear indication that it may not always be necessary to identify the non disabled comparators, she went on to say:

"In many cases the facts will speak for themselves and the identity of the non disabled comparators will be clearly discernible from the provision, criterion or practice found to be in play."

18. It seems to be that what she meant was that where it is plain from looking at the terms of a provision, criterion or practice that it affects both those who are disabled and those who are not, then the group with whom comparison should be made is identified simply by reference to the provision, criterion or practice itself. (It is those to whom the provision, criterion or practice applies who are not disabled by the relevant disability.) This is not, of course, to say that comparators do not have to be identified because the wording of the statute: section 4A(1) requires such a comparison.

19. Mr Linden QC submitted that close scrutiny of such provisions demonstrates that a Tribunal is not concerned with the process of how a decision as to reasonable adjustment or not is made, but with the result, that is with the adjustment or lack of adjustment itself. For that submission, which we accept, he relies additionally upon the case of Tarbuck v Sainsbury's Supermarkets Ltd [2006] IRLR 664 at paragraph 71. The statement of principle is expressed in these terms:

"The only question is, objectively, whether the employer has complied with his obligations or not. […] If he does what is required of him, then the fact that he failed to consult about it or did not know that the obligation existed is irrelevant. It may be an entirely fortuitous and unconsidered compliance: but that is enough. Conversely, if he fails to do what is reasonably required, it avails him nothing that he has consulted the employee."

20. This principle thus stated should not, of course, be misunderstood. If it is said that discrimination consists in, for instance, excluding an employee from participation in consultation then the nature of the consultation process may, of course, be relevant - but that is because of the specific way in which the claim is focussed. Here we are not concerned with any such case.

21. In Spence v Intype Libra Ltd [2007] UKEAT/0617/06 the same point, albeit in different words, was made by Elias J as he was in giving the judgment of the Employment Appeal Tribunal:

"The nature of the reasonable steps envisaged in section 4A is that they will mitigate or prevent the disadvantages which a disabled person would otherwise suffer as a consequence of the application of some provision, criterion or practice […] The duty is not an end in itself but is intended to shield the employee from the substantial disadvantage that would otherwise arise. The carrying out of an assessment or the obtaining of a medical report does not of itself mitigate prevent or shield the employee from anything. It will make the employer better informed as to what steps, if any, will have that effect, but of itself it achieves nothing."

22. Similarly in the case of Hay v Surrey County Council [2007] EWCA Civ 93 one of the matters with which the Court of Appeal were concerned was the question whether the employer should have performed a risk assessment. There had been no formal risk assessment. The court agreed that the Employment Tribunal had erred (see paragraphs 28 – 30). It had done so because it had focussed upon the process of assessment rather than the question as to what adjustments ought to have been made to satisfy the duty under the 1995 Act. The Act when it deals with reasonable adjustments is concerned with outcomes, not with assessing whether those outcomes have been reached by any particular process, or that process is reasonable or unreasonable.

23. In Romec Ltd v Rudham UKEAT/0069/07 this Tribunal had to consider at part of its judgment whether an Employment Tribunal had been in error in finding that an employer was at fault in not extending a rehabilitation programme designed for a disabled employee. The Tribunal had concluded (see paragraph 23) that returning the Claimant to the rehabilitation programme would have given him "the opportunity to prove himself or otherwise". The Appeal Tribunal observed that the Tribunal had asked itself the wrong question. Commenting, paragraph 38 onwards:

"38. In determining, for the purposes of s4A, whether extending the rehabilitation programme was a step which it was reasonable, in all the circumstances, for the Respondent to take in order to prevent the PCP placing the Claimant at a substantial (that is, more than trivial) disadvantage compared with his comparator, it was necessary for the Tribunal to consider the matter set out at s18B. The first of those is the extent to which taking the step would prevent the effect in relation to which the duty is imposed.

39. True it is, as Counsel for the employee submits, that extending the rehabilitation programme would have prevented the Claimant's dismissal in the short term; but that begs the critical question, would extending the programme have enabled the Claimant to return to full duties as an engineer, thus removing the disadvantage he suffered compared with the non disabled comparator? That does not, in our judgment, require a definitive answer one way or the other. Of course if, as Counsel for the employer submits, there was no prospect of a further programme succeeding in that aim, based on the medical evidence and the failure of the first programme, it will not be a reasonable adjustment. Conversely, if, in the judgment of the fact finding Tribunal based on the evidence before it, there is a real prospect of an extended programme resulting in a full return to work it may be reasonable to expect the employer to take that course.

40. We are satisfied that this Tribunal did not embark on that enquiry. Instead, it thought it sufficient that an extended programme would give the Claimant an opportunity to prove himself or otherwise. That is the wrong approach. It was for the Tribunal to ask itself and answer the question, to what extent would an extended rehabilitation programme allow the Claimant to return to full time work as an engineer? Only after that question is answered can the Tribunal go on to answer the principal question, is that a reasonable step to take to remove the disadvantage suffered by the Claimant?"

24. Thus, so far as reasonable adjustment is concerned, the focus of the Tribunal is, and both advocates before us agree, an objective one. The focus is upon the practical result of the measures which can be taken. It is not - and it is an error - for the focus to be upon the process of reasoning by which a possible adjustment was considered. As the cases indicate, and as a careful reading of the statute would show, it is irrelevant to consider the employer's thought processes or other processes leading to the making or failure to make a reasonable adjustment. It is an adjustment which objectively is reasonable, not one for the making of which, or the failure to make which, the employer had (or did not have) good reasons.

The Essential Background Facts

25. We can turn against that introduction as to the law to deal with the background facts shortly.

26. The Claimant was employed from 20 February 1989 by the RBS. At the date of the Tribunal hearing she remained in its employment. We are told, as it happens, she has now accepted voluntary redundancy. From about 2000 she became a branch manager, but in November 2006 she developed a severe repetitive and debilitating migraine. That caused her to have frequent, though intermittent, periods of absence from work. Those absences were such as to extend to over half the working year in the years 2007/08 and again 2008/09.

27. RBS took a number of steps to assist the Claimant. It permitted her to give up working on a Saturday. It arranged that she could take a less demanding position in another branch, not any longer as a branch manager but as a customer service assistant. Alterations were later to be made to her workstation – moderating the glare from the computers and the lighting to which she was subject. References were made to Occupational Health to see if they could assist, though they thought that they probably could not given that she was receiving consultant neurological treatment.

28. She was subject to a contract of employment allied to which was a detailed sickness policy. So far as central to the case, the policy applied to all employees, though it conferred rather greater benefits upon those employees first engaged at the time she first was than those who were later to come into employment. It identified trigger points where there had been frequent absence. Frequent absence was defined as absence on more than four occasions of any length or a total of 14 working days or more in any rolling 12 month period, and long term absence as being more than 14 continuous calendar days. The policy was that where an employee has exceeded either of the absence trigger points, Policy and Advice Services should be contacted and for frequent absence disciplinary action would be considered. The scheme provided for sick pay, though this was expressly discretionary.

29. For those employees who joined the RBS at the time the Claimant did there was a sick pay entitlement for up to 52 weeks' (that is 12 months') pay during the relevant period. The period appears to be a 12 month rolling period. The effect would be, both counsel submit, we think with force, that an employee in the Claimant's position would never be in a position when she would exhaust her full sick pay entitlement, unless some other action were taken which was permissible by the employer to bring her employment to an end or otherwise within the policy. The policy makes provision for those subject to a disability.

30. Under the heading, "Failure to Improve Attendance/Disciplinary" it is provided that, "If the absence triggers are hit then formal disciplinary warnings may be issued," and:

"Sick pay may be stopped for absences that occur during the life of a disciplinary warning for attendance."

At another part of the policy it recommends to managers that as a matter of course sick pay is stopped in such cases. The evidence before the Tribunal, it is common ground, was that in 99.5% of the cases that is what happened.

31. Thus, if there were to be a reference to what is called a Disciplinary - but might perhaps better be called a Sickness Review - Hearing within the policy for someone who is likely, by reason of an underlying disability, to take intermittent absence from work, that employee will lose her or his entitlement to sick pay - whatever it may be - if the policy is applied to such a person as it would be applied within its terms to anyone who fell foul of the trigger points.

32. The Claimant had 128 days absence between 2007 and 2008. The trigger points were passed; nothing was done. It was argued by the Respondent that the Claimant's absences and the trigger points they generated had not resulted in a disciplinary warning and hearing and that that was a reasonable adjustment which had already been made in the Claimant's case. However, this abstinence from action came to an end.

33. The Tribunal's findings were that on 8 April 2008 there was a meeting between the Claimant and her Branch Manager, a Miss O'Donnell. Miss O'Donnell wrote to the Claimant and handed her a letter inviting her to a disciplinary meeting on 14 April 2008. As it happens, the meeting did not take place until 20 May 2008 because of further sickness absence. When she did attend the meeting, together with a union representative, she was given a disciplinary warning for 12 months as to her attendance and, in accordance with the usual practice, her sick pay was withheld for the period of the warning.

34. The Tribunal in part of its judgment seems to us to be saying that the employer should have told the employee, some time before there was any formal disciplinary hearing, that if she did not improve her attendance this was a real possibility. This criticism, however, does not sit easily with findings of fact which the Tribunal made in paragraph 5 in which it reviews the facts at some length. Thus, in paragraph 5.17 it records that the Claimant understood, as a consequence of a return to work interview on 18 March 2008, from what was said to her there that there was a possibility that disciplinary action might be taken if her attendance did not improve.

35. The evidence was that at each of the return to work meetings that occurred there was reference to the possibility of disciplinary action. However, be that as it may, what happened as a consequence of the disciplinary hearing and its conclusion was that the Claimant complained by letter that, in taking the action it did, the RBS had been in breach of her contract of employment and in breach of its duties to her under the Disability Discrimination Act.

36. She made a number of complaints. Those which are relevant for this appeal are identified between paragraphs 25 and 33. They are, first, that the RBS failed to make a reasonable adjustment in its decision on 20 May 2008, by giving a warning and in the withdrawal of sick pay. Secondly, the Tribunal considered a claim that so to act was to discriminate for a disability related reason against the Claimant. We shall look at each of those matters in turn beginning with the first; that is reasonable adjustment.

37. At paragraph 33 the Tribunal said this:

"The Tribunal then considered the complaint which was raised in the Originating Application that the Respondent failed to make a reasonable adjustment in the decision on 20 May 2008 to enforce the sickness absence policy, give a warning, and withdraw sick pay. The Tribunal found that the Sickness Absence Procedure and its application did constitute a provision or practice which placed the Claimant at a substantial disadvantage in comparison with persons who were not disabled and that a duty therefore arose on the part of the Respondent to take such steps as were reasonable in all the circumstances for it to take in order to prevent that provision from having that effect. The complaint in this case was not about the terms of the policy itself but its application to the Claimant. The first adjustment considered by the Tribunal was the application of the following rule which was contained in the sickness absence procedure:

'Where an employee has exceeded either of the absence trigger points policy and advice services should be contacted and for frequent absence disciplinary action will be considered'."

38. If one looks here for the approach enjoined by Environment Agency v Rowan and endorsed by Fareham, it is absent. There is no statement that we can see, nor one to which Mr Morton was able to point us, as to the nature of the substantial disadvantage which the provision or practice is said to have given rise. Unless that was identified, then logically one simply could not know whether any adjustment was reasonable because it would have to have a practical effect on the disadvantage. For that, one needs to know what the disadvantage is. Here it appears to have been assumed but not stated: but it is not self evident.

39. In particular, if one steps back from the minutiae of the judgment this was the position. Everyone who worked for RBS was subject to the terms of a sickness absence policy. On its face no one, whether disabled or otherwise, was advantaged or disadvantaged compared to any other because they were all subject to the same policy. To the extent that someone who was disabled might suffer further periods of sickness than the non disabled, the sickness policy provided in the Claimant's case that she should continue to receive full pay.

40. It is difficult, therefore, to see that the sickness absence procedure itself could constitute a disadvantage to the Claimant. If she was likely to be more absent than someone not suffering from her relevant disability she would be benefited rather than disadvantaged when compared. The position is further complicated by the evidence which there was before the Tribunal which was, and here we summarise, to the effect that in most cases the employer would apply the trigger points as the policy suggested. However, in some - and in particular those were cases where there was a chronic or long term disability - the trigger points might be "flexed" (i.e. relaxed).

41. The Tribunal dealt with this at paragraph 5.38. It took evidence from a Ms Owen, Group Head of Safety, Health and Wellbeing and from a Mr Watson, the Technical Manager within HR Policy and Advice. The Tribunal had begun its decision by recognising that the evidence of all parties was broadly to be accepted. It quoted what Mr Watson had said. He had said that where there was a disabled employee or an employee with an underlying medical cause the trigger points might be flexed, that is adjusted, in the range of 100% to 200%. 100% here is a doubling of the days, to 28 days instead of 14, so 200% becomes 42 days. He went on to explain that the majority of absences did not result in periods of absence in excess of the trigger points and an absence requiring flexing of the trigger points in excess of 200% would be extremely unusual.

42. At this point the Tribunal represent by a series of dots what Mr Watson went on to say. What did follow, and the Tribunal omitted, was Mr Watson saying in his witness statement, which he adopted as his evidence before the Tribunal, that there were very few instances where the particular circumstances of the case indicated that an adjustment in excess of 200% of the trigger points would be reasonable and appropriate. The range of 100% to 200% fixing for a disabled employee or an employee with an underlying medical condition by way of reasonable adjustment was a norm or rule of thumb balancing the needs of employees against sustainability in terms of cost and disruption to the business. Later, in paragraph 18, he was to say that the triggers might be flexed beyond 200% in an exceptional case but that would be very unusual and for particular circumstances.

43. We return, therefore, to that which the Tribunal was saying at paragraph 33. The application of the policy to the Claimant was, the Tribunal were told, and appear to have accepted, to extend the trigger points to 800%. Thus, it might seem, taking a view from a distance, that the Claimant had received an advantage in the way in which the scheme had been administered in her case, when compared to the way in which it had been applied both in the majority of cases of those who were disabled, and by comparison with anyone subject to the Sickness Absence Policy who was not suffering from any long term relevant disability or underlying medical condition.

44. The Tribunal do not identify in paragraph 33 what the substantial disadvantage was to which they were there referring. Given the overview to which we have just referred it seems to us essential that they should have done so if it was going to be the basis for any future finding. Without doing so they could not say whether any adjustment would remedy that disadvantage, because it is that disadvantage upon which there has to be focus.

45. The statute expressly calls for a comparison with persons who are not disabled. In this part of its decision there is no obvious discussion of such persons, let alone any categorisation of those who would form the relevant comparator class. Mr Linden QC would have it that the class of persons who are not disabled here would mean all other employees in the employment of RBS, subject to the Sickness Absence Policy but not disabled, that is employees going about their business day to day and not regularly sick, as well as those who from time to time might be. By comparison with them he says, in line with the overview that we have just recorded, it could not be said that the Claimant could possibly be disadvantaged, rather the opposite.

46. Mr Morton would argue that the comparison here should have been with persons who were not sick by reason of disability. Those who were sick by reason of disability would necessarily be more likely to subject to the trigger points and more likely, therefore, to be exposed to a disciplinary hearing and more likely, therefore, to be subject to a loss of sick pay in consequence. We have little hesitation in thinking that in particular bearing in mind that any comparison here should be a comparison of those who but for the disability are in like circumstances (see Malcolm) that Mr Linden QC's submission is correct. In any event, Mr Morton cannot point us to the particular group with which the Tribunal had in mind to make the comparison just as he cannot point us to any identification by the Tribunal of the disadvantage which the Claimant suffered but which they in comparison did not.

47. The Tribunal went on to discuss the flexible application of the policy and at paragraph 35 said this:

"It was submitted by Ms Kearns that if the Tribunal were to uphold the complaint in this case the consequence for the Respondent would be that they would be in breach of the 1995 Act in all cases of absence caused by a disability where they applied the terms of the procedure and considered or took disciplinary action. With respect to Ms Kearns the Tribunal disagrees. It is clear that the managers in this case had considered the circumstances of the case not to warrant the application of disciplinary action for a long period prior to April 2008. The focus of the Tribunal's attention was on the decision made by Ms O'Donnell in May 2008 to invoke the disciplinary procedure and the reasons and manner in which she then did so."

We pause there to note that, given the law as we have recited it at the start of this judgment, that was precisely the wrong focus. The reasons, and the manner in which Ms O'Donnell came to hold them, and her decision are irrelevant. What matters is whether there was an application of the policy which caused a disadvantage which was substantial in comparison with persons who were not disabled. The Tribunal continued:

"According to Mr Watson […] the extent to which the Respondents had relaxed the application of this rule in the Claimant's case was "an exceptional 800%". The Tribunal also noted the absence of any written or published procedure setting out the factors to be taken into account by a manager when making a decision on the application of this provision."

48. When Mr Morton was asked in argument to show the relevance of the latter sentence, let alone the rest of paragraph 35, he was unable to do so. We consider also that paragraph 36 sadly contains nothing which is relevant to the decision the Tribunal had to make, though because the Tribunal had included it presumably it thought so. It reads:

"36. Mr Watson attached great significance to one factor which was whether the individual would be able to render consistent and effective service in the future as a factor to be considered by the manager in making a decision to take disciplinary action because of sickness absence. The Tribunal noted that Ms O'Donnell had not made reference to this as a factor at the time she made and announced the decision nor did she make reference to it in her evidence to the Tribunal and concluded therefore that this had not been a factor which operated on her decision making at the time.

37. Having heard her evidence the Tribunal formed the view that Ms O'Donnell had not exercised a discretion but had carried out the instructions of the Policy and Advice Services (Human Resources) who in April had said that she should take disciplinary action. […]"

Paragraph 37 went on to discuss what Ms O'Donnell had or had not taken into account, whether she had shown the Tribunal that she was applying the policy in a way so as to exercise her discretion to take account of all the relevant circumstances, and whether she had told the Claimant that she was now considering enforcing the policy in circumstances where it had not been enforced over a long period of time. None of this is relevant to the questions the Tribunal had to ask, however relevant it might have been if the employee had been dismissed and the Tribunal were considering a claim to which section 98 of the Employment Rights Act 1996 applied.

49. At paragraph 38:

"The Tribunal found that it would have been a reasonable adjustment for Ms O'Donnell to effectively exercise her discretion in such a way that the decision to apply the disciplinary procedure could be deferred until one of a number of events which were known (such as the outcome of the new treatment or a period of reasonable notice to the Claimant) that the Respondent was now taking a different view of the absence."

Mr Linden QC objects that this is to display the very same error as categorised as a flaw fatal to the decision in the Romec case. We agree. Paragraph 38 goes on:

"The advice received by Ms O'Donnell from HR on 18 March indicated that they believed that the Claimant may be subject to the provisions of the Disability Discrimination Act but this fact does not appear to have been explicitly considered by Ms O'Donnell."

Again, we cannot see the relevance of this to the question which the Tribunal had to ask itself.

"In terms of entitlement to sick pay the terms of the contract provided the Claimant with an entitlement to twelve months on full pay based on the length of service, albeit phrased in terms of a discretionary entitlement. At the time the decision was made to impose a disciplinary sanction and withhold sick pay the Claimant had in the previous twelve months had 128 days of absence and had not therefore exhausted her entitlement to sick pay.

39. Unlike the case of O'Hanlon the claimant in this case did not claim that the reasonable adjustment was the provision of indefinite full pay during absences for disability related reasons. She sought sick pay in accordance with the scheme on the basis of her entitlement which was 52 weeks full pay. The Tribunal therefore concluded that the Respondent did fail to make a reasonable adjustment when Ms O'Donnell failed to exercise her discretion within the policy in making the decision on 20 May to give a disciplinary warning." (Our underlining)

50. Although there is a frank error here in what the Tribunal says - because it had earlier at paragraph 5.33 dealt with that which the Claimant was saying which indeed did include a claim which could only reasonably be interpreted as that - nonetheless our focus is upon the logic of the Tribunal. We cannot understand how the conclusion indicated by the use of the word "therefore" follows from the factual premises which are set out. Mr Morton was unable to enlighten us.

51. The problems with the Tribunal's approach sadly do not stop there. It agreed at paragraph 40 that the Respondent had made a reasonable adjustment by not enforcing the absence policy until it did, but says that when it suddenly stopped making the adjustment it "did so unreasonably". The focus has to be upon whether the adjustment itself is or is not reasonable. This phrase might imply that it was unreasonable, but does not state so, and it appears to focus upon the behaviour of the employer toward the employee, which is not the focus required by the statute.

52. The Tribunal then discussed between paragraphs 41 and 44 what a reasonable adjustment might have been. Different possibilities were contemplated. What is absent, taken generally, is a conclusion as to how each of the particular possibilities considered would have been effective to remedy the disadvantage which by definition the Tribunal must have found, though it did not specify, as between her case and the cases of others who were not disabled. It spent some time, at paragraph 43, discussing a particular issue. That is whether the absences from work of the Claimant had become unsustainable - unsustainable being used here, submits Mr Morton, in a way which is to be read as unacceptable rather than financially unsustainable - and concluded that having discussed it the Tribunal would not make a finding on it. The matter had not been raised in the Originating Application.

53. Mr Linden QC complains, and again we agree, that if the Tribunal is to have proper regard to section 18 as it is required to do it will consider the first few questions in 18B, which include the financial and other costs incurred by taking this step – that is the extent of the financial and other resources, in other words, broadly, the acceptability from the employer's operational point of view of the adjustment such as the Claimant was proposing. So, the Tribunal was in fact obliged to make a finding upon it, but declined to do so.

54. So much for the decision to discipline.

55. The Tribunal then turned to the decision to withhold sick pay. Again, the Tribunal focussed upon the way in which Ms O'Donnell went about a decision as opposed to whether the decision or its result was itself a failure to make a reasonable adjustment. It found that she did not exercise her discretion at all. However, having decided that disciplinary action would be taken she went on to decide that sick pay would be withheld as a result of the warning. The Tribunal concluded that it would have been a reasonable adjustment for the Respondent in this case to exercise its discretion not to withdraw sick pay. The length of time for which the discretion would then be exercised would inevitably have been the subject of discussion and agreement at the matter being considered by Ms O'Donnell and possibly investigated with the benefit of advice from Occupational Health.

56. There is a very real difficulty for employees who wish to show that a failure to pay sick pay is a failure to make a reasonable adjustment in their case. The difficulties are demonstrated by the case of O'Hanlon v Revenue and Customs Commissioners [2007] ICR 1359, [2007] EWCA Civ 283. The case concerned a sick pay scheme. The argument had been that to insist upon the sick pay scheme in the form applicable to all employees was to disadvantage the disabled Claimant because its effect on her was that paid sick leave attributable to her disability absorbed the paid sick leave to which she would otherwise have been entitled for occasional ailments. That was the only reason put forward on appeal for not applying the rules to the Claimant herself, other than assessing the financial hardship which she suffered or the stress resulting from a lack of money - a stress which the court thought would no doubt be equally felt by a non disabled person absent for a similar period. The Tribunal had said that it would be a very rare case indeed where giving higher sick pay than would be payable to a non disabled person, who in general does not suffer the same disability related absences, would be considered necessary as a reasonable adjustment

57. What Hooper LJ said, at paragraph 45, was that the only particular feature put forward on behalf of the Claimant in that case was that of financial hardship. He agreed with the Employment Appeal Tribunal that it would be quite unjust and unrealistic to say that employers should now be found to have failed to establish justification because they did not have regard to other factors relating to the Claimant. He agreed with what the Employment Tribunal had said as to the financial hardship which would inevitably be suffered, as would stress, to a non disabled person absent for a similar period. He dealt with an argument that the periods of sickness on disability should have been disaggregated and said that that had to fail because the policy itself was not attacked (reasoning which would be applicable to this present appeal, because here too the policy is not under attack).

58. The head note accurately summarises the conclusion to which the court came. For the purposes of section 3A(2) the Employment Tribunal in that case had been right to accept that the employer's sick pay rules placed the Claimant at a substantial disadvantage in comparison with employees who were not disabled. Its effect was that paid sick leave attributable to her disability absorbed the paid sick leave she would otherwise have been entitled for occasional ailments. The only reason put forward on appeal for not applying the rules to the Claimant herself was additional pressure placed on her by financial hardship feeding into her depression but it would be invidious for an employer to have to determine whether to increase sick payments or separate periods of disability related absence from absences unrelated to disability by assessing the financial hardship suffered by the employee or the stress resulting from a lack of money, which would equally be felt by a non disabled person absent for a similar period.

59. The case here, of course, is one in which under the RBS Sick Pay Provisions the employee would never run out of sick pay so that the balance between the periods when she would have been absent for reasons relating to her disability and those where she was absent for other reasons would be irrelevant in her case, though it was not in that of O'Hanlon. We would wish to fight shy of a general conclusion that where there is a sick pay scheme (and even one where there is a discretion to treat those who are disabled more generously than those who are not) there can never be a proper case where discrimination by failure to make a reasonable adjustment can be shown. However, it is self evident that it must be an exceptional case with particular features which can be clearly drawn to the Tribunal's attention which would need to be clearly identified. We do not see any such particular feature here.

Disability Related Discrimination

60. When it dealt with disability related discrimination the Tribunal considered that taking disciplinary action and withdrawing sick pay were potentially less favourable treatment. The focus of its attention here was on the comparison and the nature of a comparator. The Tribunal had earlier (see paragraph 12) identified the relevant comparator in the last sentence of that paragraph as "a non disabled person who has been absent for the same length of time as the Claimant."

61. The Claimant identified an employee who worked in her branch. Mr Morton took us carefully through the evidence in respect of that employee, known as Employee X. At page 33 of its decision, paragraph 45, the Tribunal had shown that Employee X had 214 days absence whereas the Claimant had had 128 days absence. It identified differences in the circumstances of the Claimant and her comparator as follows:

"1. In Employee X's case after the conclusion of the corrective surgery the prognosis was certain and in terms which indicated a tangible return to work date.

2. Ms O'Donnell had dealt with Employee X as a case of long term rather than short term absence.

3. The absence in Employee X's case was planned; Ms O'Donnell had used additional staff to cover the time when she knew that Employee X would be away from work.

4. No disciplinary action had been taken against Employee X and sick pay had not been withdrawn.

5. Employee X was not treated by the Respondent as disabled."

62. That last point requires further elaboration. The Tribunal at no stage dealt with whether Employee X was or was not disabled. The evidence which was before the Tribunal as to X in the witness statement of Mr Stone, who gave evidence on behalf of the Claimant, was that she had been off work for eight months. She referred to X as a disabled person. Ms O'Donnell in her evidence described the Employee X as suffering from a disability which meant that she needed to have operations on her back hands and feet. It is plain from that paragraph that she regarded Employee X as being disabled. In paragraph 19 she elaborated that the problem with the hands and feet had built up and got worse over the two years leading up to August 2007, such that eventually she needed to have operations which were expected to cure the problems.

63. Her first disability related absence lasted from 3 August 2007 till 17 March 2008 when she had operations on both her feet; but not her hands. Her feet were both operated on at once in August 2007. She then had had one hand operated on in about November 2007 and the other hand about eight weeks later in about January 2008. All of that took place within the same 162 day absence period. She returned to work in March 2008. After each of the operations there was a period of convalescence before the next one. The operation on one hand needed corrective surgery which took place in October 2008, and she was then off from October 2008 until late December 2008 for that operation, but that was also a complete success.

64. The prognosis was, and had been, that she would, after those operations, be able to return to work. When we invited counsel to comment upon whether on that evidence it would have been open to the Tribunal to find that Employee X was anything other than disabled, they had difficulty. We did not press Mr Morton on the point, given the difficulties which it might hold for his case. However, it seems clear to us that on any definition of disability within the Act she would almost inevitably qualify as disabled and, secondly, that the Tribunal did not, it would appear, have regard to the only evidence before them which was that the Respondent did regard her as disabled when coming to a conclusion to the opposite effect, based upon no material to which we have had our attention drawn. In short, in this as sadly one or two other respects which we have mentioned in passing the Tribunal have been in material misapprehension of some facts.

65. The Tribunal set out its conclusion having described the different features of Employee X and the Claimant in these terms:

"47. On balance the Tribunal found that the circumstances of the two women were such that Employee X could be considered to be an appropriate comparator. The key similarity was that both women had absences significantly in excess of the trigger point set out in the procedure. In fact the amount of absence for Employee X was 1400% in excess of the trigger points which was significantly more than the Claimant. The reason given by Ms O'Donnell for not having taken disciplinary action against Employee X was that the flexing of the triggers had enabled her to improve her attendance. The decision that action was to be taken against the Claimant was explained with reference to flexing the triggers and the treatment still not being such as to enable her to improve her attendance. The Respondent concluded that the absence had reached a level which was unsustainable. On the analysis used by the House of Lords in Malcolm, is the reason for the treatment related to the Claimant's disability and was the non disabled employee dealt with for the same reason? The Tribunal concluded that the reason for the treatment did relate to the Claimant's disability as Ms O'Donnell said that the flexing of the triggers had not led to an improvement in attendance. As for the question whether the Respondent would treat a non disabled person in the same way, the Tribunal found that the Respondent had not demonstrated that it would treat a non disabled person in the same way. The evidence was from Ms Owen and was in the form of anecdotal evidence that in 2008 19 people had been dismissed out of 2,500 cases where the triggers had been flexed. Were the employees in these cases disabled? What were the factors applied by the Respondent in dealing with the triggers when dis applying or applying them?

48. On the reasoning of the House of Lords in the Malcolm case, where the finding is made that the non disabled person would have been treated more favourably, this is direct discrimination rather than disability related discrimination. However, in this case the finding is that the Respondent has not shown that it would have treated a non disabled person in the same way and therefore the Tribunal upheld the complaint of disability related discrimination.

49. Having found that Employee X was an appropriate comparator the Tribunal did not consider the circumstances of a hypothetical comparator.

50. This raises a prima facie case of discrimination and the Tribunal went on to consider whether the treatment of the Claimant was justified. The Tribunal began by considering the word: 'to justify' in the sense of showing something to be reasonable. […]"

66. The statute at section 3A may involve a comparison with a named comparator. If so, then per Malcolm that comparator has to be in the same relevant circumstances but not disabled. Here, for the reasons which we have already given, the Tribunal was simply not entitled to treat Ms X in that way. She was disabled. However, even if she had been properly regarded as non disabled, she would not have been, and could not reasonably have been said to have been, in the same relevant circumstances. The Claimant's absence was intermittent. It was unpredictable. The prognosis, as the Tribunal itself recognised, was uncertain as to whether she would ever recover. In Employee X's case none of those were features. Her absence was predictable. The prognosis was that after the absence her disability would be rectified.

67. The lay members in particular would wish to emphasise that that is a matter of great and potentially critical importance when employers come to apply a sick pay scheme, one of the principal, if not the principal, purposes of which is in the employer's interest to ensure that employees who are sick can be helped so that they are able to return to work

68. However, the Tribunal's analysis is deficient in other respects too. The Tribunal, having dealt in paragraph 47 with its conclusion that the Claimant and X were comparable, does not seem to draw any obvious consequential conclusion from that fact, i.e. that that demonstrated that there had been discrimination which required justification. What would then require justification was the difference in treatment between the Claimant and X. Although it said that it was not considering the circumstances of a hypothetical comparator, it went to ask the question at the foot of paragraph 47 as to whether the employer would have treated a non disabled person in the same way, and did so by reference not to the comparator X, which one would have thought was the purpose of making such a specific comparison, but by reference to general evidence about the workforce as a whole; that is by reference to what seems to us to be the hypothetical comparator(s) whom the Tribunal had expressly said it was not taking into account.

69. As to paragraph 48, the Tribunal found that the Respondent had not shown that it would have treated a non disabled person in the same way. Mr Linden QC makes the point that the way in which the Claimant had been treated, which is relevant for this comparison, was to give her the advantage which was not given to a non disabled person, of having her trigger points flexed so that she received more time absent without discipline and, therefore, more time absent with the benefit of sick pay than would the non disabled person. The very fact was that they had treated her in a different way from the non disabled person and relied upon it to demonstrate that there was no failure to make a reasonable adjustment in her case. The Tribunal, he says colloquially, and we agree, had missed the plot.

70. Finally, when one comes to the question of justification the Tribunal here seem to have equated that with acting reasonably. Again, regard must be had to the statute, at section 3A(3). The point is best made through the words of Arden LJ in the case of Post Office v Jones [2001] EWCA Civ 558. At paragraph 36 she considered the words "material and substantial", which were used in the then section 5(3). She said, in words which are as applicable to section 3A as they were in the statutory context she was considering:

"36. In my judgment, those words cover different subject matter. "Material" denotes the quality of the connection which must exist between, on the one hand, the employer's reason for discriminating against the employee and, on the other hand, the circumstances of the particular case. The circumstances of the particular case may include those of both the employer and employee Baynton v Saurus General Engineers Ltd [2000] ICR 375. Under section 5(3) this connection must be material.

37. […] The use of the word 'material' rather than 'relevant' or 'applicable' indicates to me that there must be a reasonably strong connection between the employer's reason and the circumstances of the individual case. The strength of this connection involves largely a factual inquiry.

[…]

39. The second requirement […] is that the reason should be substantial. This means, in my judgment, that the reason which the employer adopted as his ground for discrimination must carry real weight and thus be of substance. However the word 'substantial' does not mean that the employer must necessarily have reached the best conclusion that could be reached in the light of all known medical science. Employers are not obliged to search for the Holy Grail. It is sufficient if their conclusion is one which on a critical examination is found to have substance."

71. Here, given our conclusion as to reasonable adjustment, we have to ask that whether the Tribunal could legitimately have come to any other conclusion than that the reason which they identified that Ms O'Donnell had for treating Employee X in a manner different from that which she treated the Claimant, namely that Employee X was always likely to return to full time work without continuing absence whereas the Claimant was not, was both material and substantial in the sense indicated by Arden LJ.

72. The Tribunal's excursion into what was or was not reasonable in this context might have been interesting but it was not answering the statutory questions. Although reference was made (paragraphs 52 and 53) to Royal Liverpool Children's NHS Trust v Dunsby [2006] IRLR 351 and to Post Office v Jones [2001] IRLR 384, the Tribunal observed (paragraph 54) that when applied to this case that Ms O'Donnell had not exercised her discretion and had not considered the fact that the Claimant was disabled when she had made the decision to give a disciplinary warning and went on:

"It is clear from the Tribunal's finding on reasonable adjustments that other factors which could have made a difference to the decision were simply not considered. These were the effect of the new treatment planned for the Claimant by the neurologist treating her to begin the following month, the possibility that absences related to disability could be excluded from the total absences within the policy for a longer period and the possibility that sick pay could continue to be paid for the period covered by the new treatment. For these reasons the Tribunal found that the decision to take disciplinary action because of the absence was not justified."

None of that appears to us to be answering the relevant statutory questions as to whether the reason for the difference in treatment was material or substantial.

73. The third part of the appeal related to unlawful deductions. It is submitted to us by Mr Linden QC that if the employer's appeal succeeds on grounds 1 and 2 then there is no basis for alleging that there were unlawful deductions, they being deductions of sick pay which would only be payable if there had been no effective decision to withdraw the sick pay in consequence of the disciplinary meeting in May 2008.

74. If, however, the appeal were to fail he submitted that the unlawful deductions claim had no appetite in terms of compensation, because it would add nothing to the sums which would then fall to be paid in respect of discrimination. We agree that, for those reasons, the claim might be seen as academic. As against the remote possibility that the criticisms which we have made of the Employment Tribunal's decision are found, on later review, to be unjustified, we should, however, deal with matters which were argued before us.

75. Essentially Mr Morton maintained that benefit by way of sick pay had been paid to the Claimant. The amount was, thus, clear; there was no question, therefore, of this being in the same category as those cases relating to bonus where the amount of the sum said to be due was yet to be established. He accepted that, although he initially began his submissions by reference to some case law which on reflection he thought did not assist his case, the Claimant must establish a legal obligation of some sort to pay the money. However, she did so here if the money had in fact been paid by exercise of a lawful discretion by the employer, such that if the decision to discipline and the consequential decision to exercise a discretion to withhold sick pay fell, then sick pay would remain payable as a result of the original and lawful exercise by the employer of its discretion.

76. We accept that argument and, indeed, Mr Linden QC did not seem to argue the contrary in reply. It is, of course, predicated upon a finding in the first place that the action to discipline and remove sick pay was a legitimate exercise by the employer of its powers and discretions within its available policies.

77. We were invited by Mr Morton in the course of his frank submissions to maintain the decision to which the Tribunal had come, to consider the disadvantage which employees suffering from long term disability have, irrespective of a sickness absence policy, and to recognise that here the Tribunal in a lengthy decision had nonetheless said sufficient to justify its conclusions. We regret that for the reasons we have given the Tribunal's reasoning as to reasonable adjustment cannot be sustained. It was so significantly flawed in its logic, in its misapprehensions of fact, in its application of the law and its misunderstanding of the relevant approach that it cannot stand.

78. In mitigation for the Tribunal it must be said that the Tribunal was dealing with statutory provisions which quite often had been recognised to be of remarkable difficulty. That, however, requires a focus upon the statute itself which, regrettably, this Employment Tribunal did not have and, in departing from its usual standards, it committed the errors of law which mean that this appeal must succeed.

79. We then have to ask what the consequence must be. It seems plain to us, first, that there is here no tenable argument which would support a claim that there was a failure to make a reasonable adjustment. That is because, in the words of the statute, it has to be shown that the Claimant is at a substantial disadvantage in comparison with persons who are not disabled. The O'Hanlon case demonstrates the difficulties for a person who is claiming to have been disadvantaged by a failure to continue to pay sick pay in circumstances in which the scheme would cut off payment to those who are not disabled in establishing that there is any disadvantage at all (let alone, in this case, an advantage by extending the trigger points as happened). On any arguable view of the facts this is not one of those unusual cases which might constitute an arguable exception, where those difficulties might be surmounted.

80. Next we ask: is there any arguable case here in respect of section 3A discrimination? For the reasons we have given, X could not be treated as a relevant comparator. The case thus put must fail. If one considers the broader approach, which the Employment Tribunal might have been taking perhaps in the paragraphs to which we have referred, of regarding hypothetical comparators from within the workforce as a whole, that does not assist. There has to be shown less favourable treatment than that given to others to whom the reason does not or would not apply. There is simply nothing that we can see upon which one could base a decision here which would show that such less favourable treatment was made. However, if it were, then the reason for it would not be both substantial and material arising out of the wording of subsection (3), and there being no question here of direct discrimination on the grounds of disability or of the application of section 3A(6) that is an end to it.

81. It follows that there is and could be no arguable case here, and the Tribunal should so have found. This appeal is, therefore, allowed; the decision of the Tribunal is reversed and it follows that the appeal in respect of the remedies hearing must also be allowed if indeed it could be considered to be extant. The order must reflect that the claim is dismissed.

82. Had we continued in our judgment we would have had to deal with the question of whether or not the Tribunal was biased in that the Chairman refused to recuse herself, having been accused of taking against the employer irrationally in earlier proceedings and in various other respects. We have not, thankfully, found it necessary to resolve that appeal because of the conclusions to which we have come on the substantive grounds, though in case it should hereafter be relevant simply note there would have been a significant argument to have been considered.