A recent case at the Court of Appeal forces employers to think carefully about the way sick pay is paid. Normally, an employer will have a contractual obligation to pay full salary for an initial defined period of sickness absence or alternatively will make it clear that he is to pay Statutory Sick Pay only.

In the case of Nottingham County Council v Meikle the Court of Appeal identified, for the first time, a circumstance where full salary is potentially payable to a sick employee even where that employee has no contractual entitlement to it.

Ms Meikle was a teacher who suffered from an eye condition which resulted in her becoming partially sighted. She was a "disabled person" for the purposes of the Disability Discrimination Act 1995. She needed time off work and was initially paid full pay in accordance with the council's sick pay policy, which reduced to half pay after six months' absence. Ms Meikle argued that this reduction was a breach of the Disability Discrimination Act - and the court agreed.

The court said employers have a duty to make "reasonable adjustments" to the working arrangements of disabled employees to ensure that they are not disadvantaged in the workplace. In this case, the court went on to say, the council's actions in sticking to its sick pay policy breached that duty. It took the view that the duty to make reasonable adjustments extended to the operation of contractual benefits such as sick pay and that a reasonable adjustment in this case would have been to have awarded Mrs Meikle full salary during the entire period of her absence.

This controversial decision will lead to widespread concern among employers. However, what is reasonable for a local authority is not necessarily reasonable for a smaller undertaking - but where is the line to be drawn?

Stephen Elliott is a solicitor in the employment team of North-East law firm Ward Hadaway. He can be contacted on 0191-204 4000 or by email at stephen.elliott@wardhadaway.com

Published: 20/07/2004