Case Law states that ‘in one way or another, steps should be taken by the employer to discover the true medical position’ prior to any dismissal for incapability/ill health. In most cases, this involves consultation with doctors. A failure to seek proper medical advice where appropriate is likely to result in a finding of unfair dismissal. Only in ‘wholly exceptional circumstances’ would an employer be excused for not taking such steps – for example, if the employment is of a special and critical nature that requires a higher than usual level of attendance.
The importance of complying with a fair capability/ill-health procedure cannot be overestimated. In particular, the ‘Polkey exception’, whereby an employer can exceptionally be entitled to dispense with a proper termination of employment procedure if it could reasonably have concluded that this would have been ‘utterly useless’ or ‘futile’) will rarely – if ever – apply in a case where a proper medical investigation has not been undertaken.
Medical investigation and prognosis
The onus to take reasonable steps to obtain up-to-date medical advice about an employee’s condition and prognosis lies squarely on the employer, not the employee. The Court of Session (Inner House) emphasised that this duty simply requires that the employer obtains proper medical advice; it does not require it to pursue detailed medical examination. Nevertheless, in circumstances where the medical advice might have changed, the employer may be acting unreasonably if it fails to get an up-to-date medical report before dismissing.
Normally, it is the employee’s own GP from whom the initial medical opinion will be sought. Where the employee is absent beyond the period that can be self-certified, he or she is likely to have obtained – and provided to the employer – a ‘statement of fitness for work’ (colloquially known as a ‘fit note’) from the GP responsible for the employee’s care. The fit note gives the doctor the option of declaring the patient either ‘not fit for work’ or ‘may be fit for work taking account of the following advice’. The form goes on to list four typical examples of modifications that might be appropriate (a phased return, amended duties, altered hours and/or workplace), and provides space in which the GP can add more detailed comment or advice. Simply ignoring or failing to consider suggestions made is likely to render any subsequent dismissal unfair, since employee consultation and consideration of alternative employment are key factors for ensuring a fair procedure (see ‘Avoiding unfair dismissal’ below).
Crucially, a decision to dismiss on medical grounds will not be reasonable unless
the employer has all the relevant facts that are known, or which could reasonably have been discovered at the time the decision is made. Where there is any doubt, a specialist medical report may well be necessary, since any decision to dismiss without one is apt to render the dismissal unfair. On receipt, the employer will need to evaluate the report carefully in accordance with the guidance outlined in the box below.
When deciding whether to dismiss an employee for lack of capability, an employer must take account not only of the employee’s current, but also his or her future, level of fitness. If there is evidence that the employee’s condition will worsen, should he or she return to work, this may make dismissal fair, even if the employee is currently fit to do the job. If, on the other hand, the employer ignores a favourable prognosis, dismissal may be unfair.
If two medical reports conflict about the prospects of an employee’s likelihood of
a full recovery, the failure to investigate further (perhaps by way of a third opinion) could cause a dismissal to be unfair, particularly where the difference of opinion is substantial. It also suggested that where a second (or indeed third) medical opinion is being sought, that doctor should have sight of the previous medical report(s) to ensure consistency and that all relevant issues are covered. where discovery of the true medical prognosis is likely to come as a deep shock to the employee, or where the employee is suffering from severe mental illness rendering him or her delusional.
Proper consultation would normally include:
- discussions at the start of the illness, and periodically throughout its duration, and informing the employee if the stage when dismissal may be considered is approaching
- personal contact with the employee
- consideration of the medical evidence
- consideration of the employee’s opinion on his or her condition
- consideration of what can be done to get the employee back to work
- consideration of offering alternative employment, if any, in the employer’s business, and
- consideration of an employee’s entitlement to enhanced ill-health benefits, if available.
The non-statutory Acas guide, ‘Discipline and grievances at work’ (July 2020) (‘the Acas guide’), recommends that where an employee is on long-term sick leave, the employee and the employer should keep in regular contact and the employee should be kept fully informed if there is any risk to his or her employment. Even if an employer has obtained medical evidence, it is important to consult the employee before any decision to dismiss is taken in order to keep the employee informed and to ensure that the medical report has not been misinterpreted. But this must be done sensitively. If the employee is housebound, a visit by the employer may be a sensible course, but only with the employee’s consent. Less intrusive options, such as contact by Zoom (or similar), telephone or even email, may be preferable, since face-to-face meetings will not always be necessary. Much will depend on the circumstances of the employee, and an employer would be well advised to establish the employee’s preferred form of communication in the initial stages of consultation. The employee’s own opinion as to his or her likely date of return and what work he or she will be capable of performing should be considered and discussed.
If the employee states that he or she is anxious to return to work as soon as possible and hopes to be able to do so in the near future, this will operate in his or her favour. On the other hand, if the employee states that he or she is no better and does not know when a return to work is likely, this will be a significant factor operating against him or her.
The employer should also be aware that even if it is holding what it regards as a ‘capability’ meeting to discuss the employee’s ill health, the statutory right to be accompanied will apply if it is likely to result in dismissal. Under S.10 of the Employment Relations Act 1999 (ERelA), where a worker ‘reasonably requests’
to be accompanied at a ‘disciplinary hearing’, the employer must permit
the worker to be accompanied by a ‘companion’. The companion – chosen
by the worker – may be a trade union representative or a fellow worker – S.10(2A). A disciplinary hearing is defined in the ERelA as a hearing that could result in the administration of a formal warning, the taking of some other action or, in the context of an internal appeal, the confirmation of a warning issued, or some other action taken (S.13(4)).
In general, dismissal for long-term ill-health absence should only be adopted by the employer as a measure of last resort. The Acas guide makes a distinction between persistent short-term absences – suggesting that in some circumstances these may be dealt with as a disciplinary matter, in which case the provisions of the Acas Code of Practice on Disciplinary and Grievance Procedures (2015) will apply – and longer term absence, where ‘employers need to take a more sympathetic and considerate approach, particularly if the employee is disabled and where reasonable adjustments at the workplace might enable them to return to work’.
This was recently echoed by remarks of the current President of the EAT, Mr Justice Choudhury, when he noted that ill-health absence rarely implies fault or blame on the part of employees because they do not choose to get ill or have accidents. However, he also made clear that the total period of absence can reasonably inform the decision to dismiss and that, as regards the fairness of that decision, the question is not whether other employers might have allowed additional time to see whether the employee’s attendance improved but whether the employer’s decision and manner of handling the capability process fell within the band of reasonable responses.
Is absence ‘capability’ or ‘SOSR’?
Ill health is a potentially fair reason for dismissal as it relates to the employee’s capability of performing the work he or she was employed to do – S.98(2)(a) Employment Rights Act 1996. ‘Capability’ is assessed by reference to skill, aptitude, health or any other physical or mental quality – S.98(3)(a) ERA.
However, in the vast majority of dismissals that arise in the context of employees’ ill health, the actual trigger for dismissal is not the health condition itself but the amount of sickness absence the employee has accumulated, combined with the fact that there is no imminent prospect of a fully effective return to work. This raises the question of whether the true reason for dismissal is ‘capability’ or ‘some other substantial reason’ of a kind such as to justify dismissal (SOSR) within the terms of S.98(1)(b) ERA.
A surprising number of cases have wrestled with this question, and there
is no doubt the dividing line can be difficult to draw. In Kelly v Royal Mail Group Ltd (above), the EAT provided helpful guidance on this when upholding a tribunal’s finding of fair dismissal in the case of a postman who had a record of substantial amounts of planned and unplanned absence, and who was eventually dismissed after triggering the employer’s attendance policy following a further period of absence caused by surgery to treat carpal tunnel syndrome in his hands. The employer relied on SOSR as the reason for dismissal.
In holding that it was reasonable for it to have taken into account the claimant’s previous absence record in addition to the absence caused by the surgery, Mr Justice Choudhury observed: ‘Whilst absence-related dismissals can fall under the rubric of capability… there is no hard and fast distinction such that all absence-related dismissals must be so categorised. In the present case, the issue is not so much whether or not the claimant was capable or unable to do his work as a result of ill health, but that his attendance was unreliable and unsatisfactory. That, it seems to me, is perfectly capable of falling into the residual category of some other substantial reason.’
Essentially, as the Kelly case demonstrates, if the employee’s medical condition is the direct cause of his or her continuing absence and is the reason why he or she is incapable of performing his or her job, then the proper categorisation for dismissal will be ‘capability’. If, on the other hand, the employee is dismissed because of a history of absences, the most recent of which is not directly related to his or her medical condition, then the categorisation should properly be SOSR.
Employees with ongoing health problems may struggle into work rather than continue to take sick leave. This could well affect their performance or behaviour at work and should be taken into account when deciding what action to take. Whether the matter is treated as one relating to performance/conduct or ill health will depend on a number of factors, including the employer’s awareness of the health problem, the extent to which it is actually causing the employee’s poor performance/ misconduct, and the nature of the poor performance/misconduct in question. Note that if the employee’s performance is not affected by his or her ill health,
but the employer nonetheless seeks to dismiss in order to protect the employee’s health from the consequences of carrying on working, this will amount to a SOSR rather than capability dismissal.
Assuming a potentially fair reason for dismissal can be established, the dismissal will only be fair if it satisfies the reasonableness test set out in S.98(4) ERA. The key factors that will be uppermost in a tribunal’s mind when considering this matter are set out below.
Length of absence(s).
Provided that the employer has followed a fair procedure, the EAT has made it clear that the main consideration will be whether the employer could reasonably have been expected to keep the employee’s job open any longer – see Monmouthshire County Council v Harris EAT 0332/14. How much longer an employer can reasonably be expected to wait will be a fact-sensitive question based on the nature and context of the employee’s job and illness. The fact that contractual sick pay is provided or has ceased to be payable may be a factor but is not conclusive – see under ‘Sick pay’ below.
Nature of illness and likelihood of improvement.
Employers do not have to prove that an employee’s illness renders him or her incapable of performing all the duties under the contract. They only have to show that the ill health relates to the employee’s capability and that it was a sufficient reason to dismiss – Shook v Ealing London Borough Council 1986 ICR 314, EAT. Nevertheless, the proportion of work an employee is still able to carry out at the time of dismissal will be relevant to the issue of reasonableness.
If the employer concludes, following consultation with the employee and a medical investigation, that the condition is unlikely to improve and there is no prospect of a return to work in the foreseeable future even if adjustments are made, dismissal may be fair. For example, in Smith v Post Office ET Case No.7707/95 an employment tribunal took account of the fact that the chances of a clinically depressed employee on three types of medication achieving satisfactory attendance in the future were remote, when considering the fairness of his dismissal for persistent short-term absences. However, full consideration must be given to any recent improvement in the employee’s condition and/or attendance record. In Scott v Secretary of State for Scotland EAT 196/88, S, who had taken a significant amount of sick leave (largely due to a neck injury) in the past, was only absent for six out of the previous 185 days. The EAT thought that this factor, along with the lack of consultation and medical investigation, made her dismissal unfair.
If an employer reasonably reaches the conclusion (following consultation and medical advice) that the employee will not be fit for work for a prolonged period of time, the fact that, following dismissal, he or she recovers more quickly than anticipated will not render the dismissal unfair – Arriva Scotland v Weir EATS 0068/05. That said, where an employee is dismissed with notice, the dismissal does not actually take place until the notice expires, so a tribunal should take account of any changes that occur during the notice period. The same applies to any improvement reported during an internal appeal process – see O’Brien v Bolton St Catherine’s Academy (above).
Employee’s length of service.
Several tribunal decisions have suggested that in ill-health cases, as in conduct cases, more tolerance should be shown towards a hardworking, long-serving employee, particularly where his or her period of absence is comparatively short. For example, in Alexander v Downland Retirement Management Ltd ET Case No.3103380/03 the employment tribunal noted that the decision to dismiss A appeared to have ignored her good record and 17 years’ service, which the tribunal considered should have been a significant factor to weigh in the balance.
In Matthews v British Telecommunications plc ET Case No.2205791/10, the employment tribunal considered that, as M was a very long-standing employee (of 30 years’ service) with no significant prior record of sickness absence, BT plc should have ‘gone the extra mile’ to obtain medical evidence and to consider moving M to alternative work.
However, these cases should be treated with some caution following the decision of the Court of Session in S v Dundee City Council (above), where the Court considered that the employment tribunal had adopted an incorrect approach in treating the employee’s 35 years of service as a factor that was automatically relevant to a decision to dismiss for ill health. The Court observed that, in an appropriate case, long service may show that the employee is ‘a good and willing worker with a good attendance record, someone who would do his utmost to get back to work as soon as he could’ (by analogy with conduct cases, where evidence that an employee has worked for a long time without misconduct may be a strong indication that either he or she is unlikely to have done anything seriously wrong or what he or she has done can be treated as a temporary aberration). The critical question is whether, in the circumstances of each case, the length of the employee’s service, and the manner in which he or she worked during that period, indicates that the employee is likely to return to work as soon as practicable.
Effect on sales, output and other employees.
The general effect of long-term absence on output or sales may be relevant, especially in smaller concerns where there may be no possibility of arranging temporary cover. Moreover, if the sector in which the employee works is particularly fast-moving, absence could cause the employer serious disruption.
In Patval v London Borough of Camden ET Case No.2203464/07, P’s work in IT support had to be covered by his colleagues in order to avoid critical delays. This meant that they had less time for their own duties, which further impacted on service-users. A tribunal found that it was reasonable to expect an employee who had started a task to complete it, to prevent repetition. Furthermore, some tasks could not be simply handed over part-way through without incurring a substantial amount of work. After a number of both short- and long-term absences, the employer was entitled to say, ‘enough is enough’ and dismiss.
The effect of continued absence or illness on other employees may also affect the question of fairness. For example, in Ali v Tillotsons Containers Ltd 1975 IRLR 272, ET A was a member of a production team whose bonuses depended on its output. As a consequence of A’s absences through ill health and the employer’s inability to find an adequate replacement for him, the other members of the team lost money. An employment tribunal found this a relevant consideration in the decision to dismiss.
Health and safety.
A dismissal may be fair if the employee’s continued employment poses a health or safety risk to the employee or to third parties. For example, in Harper v National Coal Board 1980 IRLR 260, EAT H, an epileptic, attacked and displayed violence towards some of his fellow employees during occasional fits. The EAT acknowledged the employer’s duty to exercise reasonable care for the safety of other employees and reluctantly upheld the employment tribunal’s conclusion that H’s dismissal was fair. And in Singh-Deu v Chloride Metals Ltd 1976 IRLR 56, ET S’s job in a lead-smelting factory was not particularly skilled but demanded that he constantly had his wits about him, since it involved filtering toxic dust and fumes. There was a difference of medical opinion as to whether it would be safe to let him return to work after he had been diagnosed as having schizophrenia. However, the employment tribunal was satisfied that to allow S to return to work was a risk nobody could take in this ‘highly dangerous industry’.
Arguably, the real reason for dismissal in the cases above was not capability on the ground of the employee’s ill health but SOSR in view of the risks posed to other employees. And an employer considering dismissal on similar facts today would need to avoid discriminating against the employee under the Equality Act 2010 on the ground of his or her disabilities (see ‘Equality Act considerations’ below).
Nature of employment.
Where employment is of a special nature requiring a higher than usual level of attendance, dismissal for absenteeism may be fair, particularly if there is an express or implied term in the contract covering the situation. In Taylorplan Catering (Scotland) Ltd v McInally 1980 IRLR 53, EAT, the employee was a barman in a workmen’s camp at Sullom Voe, Shetland; a job that was ‘arduous’ and involved ‘unusual working conditions’. After several months, M developed behavioural problems and depression, apparently caused by the stress of working in these conditions. The EAT, overturning the decision of the employment tribunal, found M’s dismissal to be fair because the employer’s need for employees of robust health was ‘patent’ and it was ‘clearly established’ that M was medically unsuited to this sort of work.
There may also be other, less extreme, circumstances where the effect of an employee’s absence can be particularly damaging and may thus be a persuasive factor when assessing a dismissal’s fairness. For example, in Betteridge v St Helens Council ET Case No.2102835/04 B worked in one of the Council’s schools, which was made subject to ‘special measures’ during 2003. She suffered from chronic back pain and depression, and in October 2003 went on sick leave because of depression. By March 2004, the Council’s consultant occupational physician reported that
he doubted whether B would be able to cope with the pressures occasioned by the school being on special measures and that, although he was confident she would improve in the future, in practical terms it looked as if she might not return to work. The same conclusion was reached following a further medical assessment conducted some weeks later, following which B was dismissed. In rejecting her claim of unfair dismissal, an employment tribunal noted that B had effectively been absent for an academic year and the school was in the degrading position of being subject to special measures – a ‘devastating blow’ for which strong action was urgently needed. It held that the Council was entitled to take the view that effective and swift action was called for in order to provide pupils with certainty and continuity in the following year, and to save the reputation of the school and ensure its continuance.
The fact that statutory or contractual sick pay is provided or has ceased to be payable is a factor to be taken into account in deciding whether an employer could be expected to wait longer before dismissing. However, it is merely one of the factors to be considered and is not conclusive; dismissal effected during the currency of sick pay arrangements will not necessarily be unfair and nor will it necessarily be fair to dismiss once sick pay entitlements have been exhausted. Indeed, in S v Dundee City Council (above) the Court of Session considered that the fact that an employee had exhausted his sick pay entitlement and was no longer receiving salary was a factor suggesting that the employer could be expected to wait longer before dismissing.