May 15, 2021

In addition to seeking to avoid unfair dismissal, employers will also need to consider their obligations under the EqA. It is quite likely that the underlying condition in any case of prolonged ill health will amount to a ‘disability’ under the EqA. Where ill health is linked to advancing age, it may be necessary to consider the possibility of age discrimination. And one other possible ground of discrimination is pregnancy/ maternity discrimination in any case (nowadays, thankfully rare) where ongoing illness is linked to pregnancy.

Disability discrimination

Previously, it was always assumed that liability for disability discrimination under the EqA should be considered separately from liability for unfair dismissal under the ERA as the tests for each are different. However, this received wisdom has, to a certain extent, been turned on its head by the Court of Appeal’s decision in O’Brien v Bolton St Catherine’s Academy (above). There, the Court considered it to be ‘entirely legitimate’ for an employment tribunal to decide – in the context of dismissal for long-term sickness absence – that its finding that dismissal was disproportionate for the purpose of S.15 EqA also meant that it was not reasonable for the purpose of S.98(4). The Court accepted thatthe language in which the two tests is expressed is different. However, in its view, it would be a pity if there were any real distinction in the context of long-term sickness where the employee was disabled within the meaning of the EqA. The law was ‘complicated enough’ without parties and tribunals having routinely to judge the dismissal of such an employee by one standard for the purpose of an unfair dismissal claim and by a different standard for the purpose of discrimination law.

Reasonable adjustments.

The duty to make reasonable adjustments arises whenever the employer applies a provision, criterion or practice (PCP) that puts a disabled person at a substantial disadvantage in comparison with persons who are not disabled – S.20(3) EqA. If this duty is triggered, the employer is required to make any reasonable adjustments necessary to avoid the disadvantage in question. The following are some of the particular adjustments that may need to be made in a long-term ill-health context.

Avoiding dismissal: If an employer fails to make a reasonable adjustment that would have avoided the need to dismiss an employee, the dismissal may well fall foul of the reasonableness test set out in S.98(4) ERA. This was the view of the employment tribunal in Nikola-Erotokritou v Hertfordshire County Council ET Case No.3302508/10. In that case, N-E developed tendinitis in her hands and had to take a number of sickness absences. In August 2009, a consultant reported that she should be able to return to work as long as she had help with heavy lifting. The employer made no adjustments and dismissed her on capability grounds. The tribunal found that the employer had failed to make reasonable adjustments and that the dismissal was unfair. It stated that: ‘It seems to us illogical and perverse to hold that the dismissal can be fair and yet at the point of dismissal the respondent failed to make reasonable adjustments… [I]f and so long as it would be reasonable for the respondent to make reasonable adjustments, it must follow that dismissal cannot lie within the range of reasonable responses. That position would only prevail once the reasonable adjustments which it was the respondent’s duty to seek to apply had been tried and found to have failed.’

Similarly, in Coldicott v Vale of Mowbray Ltd ET Case No.2501923/11 C worked as
a factory operative making pork pies. She suffered from a number of health conditions, including a deformed big toe, a prolapsed disc in her back and arthritis. She had significant periods of absence that eventually led to her dismissal. A tribunal decided that VM Ltd had failed to make a reasonable adjustment of adapting equipment to enable C to use it without suffering pain, and that dismissal in the absence of investigating the provision of the adjustment rendered her dismissal unfair.

Attendance and absence policies: Many attendance/absence policies build in adjustments that take into account disability-related absence in recognition of the employer’s S.20 duty – for example, ‘absence’ may be defined as excluding disability-related sickness in whole or in part. Beyond this, however, there may be difficulties in showing that the duty requires further adjustments

to be made. In Griffiths v Secretary of State for Work and Pensions 2017 ICR 160 (Brief 1037), the Court of Appeal emphasised the importance of framing the requisite PCP with precision in the context of attendance policies. Unless the disadvantage is properly identified, it is not possible to determine what steps the employer might reasonably be expected to take to eliminate it. The correct formulation of the PCP in such cases was the requirement that the employee maintain a certain level of attendance at work in order to avoid the risk of disciplinary sanctions. Approached in this way, it was clear that a disabled employee whose disability increased the likelihood of sickness absence, and who would therefore find it more difficult to comply with the PCP than his or her non-disabled peers, would be disadvantaged by it in more than a minor or trivial way.

In General Dynamics Information Technology Ltd v Carranza 2015
ICR 169, EAT, the claimant (who was disabled) contended that the employer had failed in its duty to make reasonable adjustments when it took into account a final written warning for sickness absence when dismissing him on capability grounds for not being able to fulfil his contractual role. The EAT held that, in the light of the Griffiths decision, the tribunal was justified in not defining the PCP in terms of the employer’s absence procedures but in focusing instead on the basic requirement for consistent attendance, which was fundamentally the feature that caused the employee disadvantage. However, the EAT further held that the tribunal had erred in not clearly identifying any step that it was reasonable for the employer to have taken to avoid the disadvantage. In particular, it was not a reasonable step to disregard the final warning the claimant had received pursuant to the employer’s attendance policy, since this had been issued in good faith after a long period of absence for both disability-related and non disability-related reasons.

Age discrimination

A dismissal for certain long-term conditions, such as dementia, arthritis or age-related macular degeneration, may amount to unlawful indirect age discrimination. While dismissal insuch circumstances may be objectively justifiable – particularly where the condition in question is progressive and/or terminal – the discrimination question under the EqA should be considered separately from the fairness question under the ERA. Consultation, medical assessment and consideration of reasonable adjustments will all play a vital role in such cases, both in justifying any potential discrimination and in ensuring that any dismissal is fair.

Pregnancy-related sickness

It is automatically unfair to dismissan employee for reasons related to ‘pregnancy, childbirth or maternity’ or maternity leave – S.99 ERA and Reg 20 of the Maternity and Parental Leave etc Regulations 1999 SI 1999/3312. In an ill-health context, the most relevant reason is usually one related to the pregnancy of an employee, given that women may have to take time off work because of pregnancy-related illness.
In Louis v INP Ltd t/a Initial City Link ET Case No.1501415/03, for example,
L had a number of pregnancy-related absences that led to her dismissal. The stated reason for dismissal was that L had failed to keep the company properly informed of her absences, which in turn had severely affected INP Ltd’s delivery business. An employment tribunal held that the impact on the business – no matter how harsh – did not affect the fact that L had been dismissed because of her pregnancy-related absences, and the dismissal was therefore automatically unfair.

While employers will need to tread very cautiously when dismissing a pregnant employee for persistent sickness absence, cases must always be considered on their own particular facts. In Wright v DHSS ET Folio No.1448/77, W was dismissed while absent due to being both sick and pregnant, but an employment tribunal found that it was her sickness, not her pregnancy, that was the real reason for dismissal. However, this meant only that the dismissal was not automatically unfair; the tribunal went on to hold that it was nevertheless unfair under the ordinary unfair dismissal provisions in S.98 ERA.

Long-term ill-health benefits

Dismissing an employee on capability grounds because he or she has exhausted entitlement to contractual sick pay is not necessarily unfair. The continuing existence of contractual benefits is only one of the factors that an employment tribunal should consider when evaluating the overall fairness of the dismissal – see ‘Reasonableness’ above. However, the position may be different in relation to insurance-based benefits to which an employee is entitled or in the case of an employee who is a member of a pension scheme that allows for the possibility of early retirement on ill-health grounds. In either case, dismissal with the intention of preventing an employee from taking up these benefits, or while the employee is in receipt of them, may render the dismissal unfair.

PHI and income protection schemes

Permanent health insurance (PHI) is an insurance benefit providing income to individuals who become unable to work owing to illness or incapacity for more than a short period. Subject to satisfying strict medical (and other) criteria, the employee will be entitled to receive a fixed proportion of his or her usual salary (often 50% but sometimes more) for a period specified under the PHI policy. This may be until the individual is able to return to work, either in his or her previous role or another role; until a specified period of time has passed (e.g. three or five years); or, possibly, until he or she reaches retirement age (or death if this occurs while the employee is in receipt of income). Some policies provide for employees to continue to receive payments directly from the insurer, even if the employer terminates their employment.

The purpose of PHI would be defeated if an employer could end or deny entitlements under such a scheme by dismissing employees when they become unfit for work. As a result, case law has established that there is an implied contractual term that an employee will not be dismissed without good cause if the effect or intention is to deny his or her rights under a PHI or similar scheme – see, for example, Aspden v Webbs Poultry and Meat Group (Holdings) Ltd 1996 IRLR 521, QBD. (For further details, see the feature ‘Permanent health insurance: Part 2’ in Brief 1106.)

Of course, an employer cannot be held responsible where an insurer considers an employee does not satisfy the eligibility terms for the relevant ill-health scheme. However, there may be an implied term in the employment contract that precludes dismissal in these circumstances. In Awan v ICTS (UK) Ltd 2019 ICR 696 (Brief 1107), the EAT held that A’s contractual entitlement to be paid benefits under a long-term disability plan was not contingent on the availability of insurance cover (which ICTS (UK) Ltd, having become A’s employer via a business transfer, was unable to obtain). Contrary to what was found by the tribunal below, the EAT held that there was an implied term that once ‘the employee has become entitled to payment of disability income due under the long-term disability plan, the employer will not dismiss him on the grounds of his continuing incapacity to work’. Although it accepted that breach of this term did not necessarily mean that A’s dismissal was unfair, the EAT held that the contractual position – which the tribunal had got wrong – was highly relevant as part of the circumstances against which the reasonableness of ICTS (UK) Ltd’s actions fell to be judged. Thus, the tribunal’s conclusion that the dismissal had been fair could not stand.

Early ill-health retirement

The contractual principle discussed, above, that an employee cannot lawfully be dismissed with good cause if the intention is simply to deny his or her rights to contractual ill-health benefits, was extended to a case concerning ill-health retirement in First West Yorkshire Ltd t/a First Leeds v Haigh 2008 IRLR 182 (Brief 849). There, the EAT held that it was unreasonable, and thus unfair, for an employer to dismiss an employee without first considering whether he or she was contractually entitled to be medically ‘retired’ and granted an ill-health pension. Given this, the tribunal had been entitled to find that the employer should have waited for a medical specialist to report back on whether H was likely to
be permanently incapacitated before dismissing him for incapability.

The Haigh case was distinguished in Matinpour v Rotherham Metropolitan Borough Council EAT 0537/12, where M was dismissed on the ground of ill health after being absent for 14 months. He contended that, in the light of Haigh, there was a duty on the respondent Council to postpone dismissal to enable the possibility of ill-health retirement to be explored, and that the failure to do this rendered the dismissal unfair. However, the EAT held that this would only be the case if the terms of the relevant scheme specifically imposed a duty on the employer to consider early retirement prior to dismissal in the case of long-term ill health. Here, there was no such obligation: the sole basis on which an employee could qualify for ill-health retirement under the terms of the relevant pension scheme was if medical opinion confirmed that the employee had a condition that was deemed to be permanent (i.e. likely to last until the employee reached normal retirement age (65 in this particular case)) and which prevented the employee from returning to his or her job. In this case, the thrust of M’s unfair dismissal claim had been that he would, in fact, have been able to return to work within two months or so after being dismissed in February 2010, and that his GP had actually declared him to be fit in August 2010. On that basis, the Council had been entirely reasonable not to consider M for ill-health retirement in February 2010, since there was absolutely nothing that should have suggested to it that he would not have been fit to return to work before he reached age 65.

Ask Us Anything About HR, Employment Law or Health & Safety

Get FREE access to our factsheet library