January's Employment Appeal Tribunal decision in Pal v Accenture (UK) Ltd is an important legal insight into managing chronic conditions in the workplace, and the fairness of progression-based performance models.
The case concerned the assessment of endometriosis as a disability, an "up or elsewhere" policy, and the reduction in compensatory awards where an employee would have been dismissed had their employer acted fairly (Polkey reduction).
Background
Accenture's progression-based "up or elsewhere" model expects employees to demonstrate continuous development towards promotion or they are classified as underperforming.
Ms Pal had worked for Accenture for 10 years when, in 2018, she had urgent surgery and was subsequently diagnosed with endometriosis. As a result, she had two periods of absence totalling four months. Following two consecutive "not progressing" ratings, Ms Pal was dismissed in July 2019. Her appeal was rejected, and so, she brought claims of unfair dismissal and discrimination arising from disability.
The Employment Tribunal upheld the unfair dismissal claim but applied a Polkey reduction of 100%, meaning that Ms Pal was awarded no compensation. The claim for discrimination arising from disability was dismissed.
Employment Appeal Tribunal (EAT) decision
The EAT found that the Tribunal had erred in its decision to make a 100% Polkey reduction, finding that the Tribunal had used the wrong counterfactual. The Tribunal had assumed Accenture would have implemented a new policy mirroring the steps taken in Ms Pal's dismissal rather than hearing evidence on what the employer might have done if it complied with its own policy. The judgement did not demonstrate that dismissal was inevitable.
On progression-based performance models
The Tribunal had concluded that the potentially fair reason for Ms Pal's dismissal was capability. The EAT observed that dismissal under a progression-based performance model may not be fair for capability, confirming that capability is assessed by reference to the work they are employed to do, not their readiness for promotion. Such dismissals may fall under "some other substantial reason", however, this would still require a significant amount of consideration.
On disability discrimination
The EAT found that the Tribunal had formed an adverse view on Ms Pal's credibility, and consequently, failed to properly analyse the medical evidence, the likelihood of recurrence, and the impact of treatment when assessing whether Ms Pal's endometriosis amounted to a disability. The EAT specifically rejected the suggestion that mild periods of relative improvement meant the condition was not long-term or would not recur.
The Tribunal's failure to adequately assess her disability rendered the entire disability analysis unsafe. The EAT remitted all issues for redetermination, delivering pointed criticism to the Tribunal for ignoring Ms Pal's medical evidence due to credibility concerns and comments that "many women have endometriosis without symptoms, or with mild symptoms, and are never diagnosed".
Practical considerations for employers:
This case drives home the importance of responding to health-absences in an appropriate manner. Employers should ensure that they are not disregarding the severity of a chronic condition such as endometriosis in circumstances where there are fluctuating symptoms. Instead, employers should obtain occupational health advice, ensure that medical evidence is recorded and explore meaningful reasonable adjustments. Employers should seek legal advice when dealing with employees with potential chronic health conditions so that a structured, evidence-based approach can be adopted and litigation risk reduced.
Additionally, employers should ensure that promotion and dismissal criteria are consistent with contracts and policies. If relying on a progression-based performance model, they should seek advice on whether their procedures are fair and in line with employment law, or they could risk unfair dismissal claims – especially in the light of the upcoming reduction in pre-requisite service requirements to bring an unfair dismissal claim.