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Clive Dobbin, Adam Wheal and Sarah Hayes | 25th April 2022

Can an employee be dismissed during long term ill health absence?


Clive Dobbin, Adam Wheal and Sarah Hayes | 25th April 2022

Can an employee be dismissed during long term ill health absence?

If an employee has been absent from work due to long term mental ill health or sickness absence, can an employer fairly dismiss on grounds of ill health? What if, during this time, the employer realises that the organisation is managing without them, are they entitled to make the employee redundant? Furthermore, if the employee is disabled, does this constitute discrimination?

Long term mental ill health absence dismissals

The Employment Rights Act 1996 provides the potentially ‘fair reasons’ upon which employers must rely in order to dismiss employees. One such reason is ‘capability’ – defined as the employee’s skill, aptitude, health or any other physical or mental quality.’

It is therefore clear that long term sickness absence or ill health can be a potentially fair reason for dismissal. However, there are many considerations that employers will need to review before dismissing in this situation.

Firstly, before dismissing, employers must always follow a fair process. The process for ill health dismissals is the same regardless of whether the employee is suffering from a physical or mental condition. However, mental health issues often require a greater degree of sensitivity and employers may be less confident in managing mental-ill health than visible, physical conditions.

A fair process will usually require following the employer’s absence policy, including consultation and investigation with the individual and obtaining medical advice to understand the likely length of the employee’s absence and any steps the employer can take to facilitate their return. During this process, the employer can explain their business needs and discuss ways in which the employee can be supported.

Where the employee may satisfy the definition of disability under the Equality Act 2010 the employer is also obliged to consider reasonable adjustments to the employee’s role and be mindful of discrimination claims.

In terms of a mental health absences, the definition of a disability may be satisfied if it is having a substantial and adverse effect on the employee’s ability to carry out normal day to day activities. In order to be considered substantial, this must have lasted for at least 12 months or be reasonably expected to last for at least 12 months.

If an individual does meet the definition of a disability, employers would then need to ensure that they do not discriminate against that individual and that they can justify any decision taken to terminate their employment.

Dismissal for redundancy during long term sickness absence

So, it is clear that employers can dismiss for ill health capability. But what if another potentially fair reason for dismissal arises whilst the employee is off sick?

Redundancy is a potentially fair reason for redundancy. It is clear that if there is a wider redundancy situation affecting the employees role, there is no obligation to exclude an employee on long term sick from the redundancy situation, they would normally be pooled with their colleagues and form part of the consultation process.

However, the situation where an employer identifies the possibility of restructuring the employees role alone because their work has been re-distributed during their sickness absence is more nuanced.

This issue was addressed by the Employment Appeal Tribunal (EAT) in 2017, in the case of Charlesworth v Dransfields Engineering Ltd. Here, the EAT provided guidance on an employee that had been absent from work for two months whilst receiving treatment for cancer.

Whilst absent from work, the Respondent identified the possibility of restructuring the company in a way that removed the Claimant’s role and absorbed his responsibilities into other roles. The Claimant was therefore told there was a redundancy situation and, having found no suitable alternatives, his employment was subsequently terminated.

Under the Equality Act 2010, cancer is identified as a disability. The Claimant brought claims of unfair dismissal, direct disability discrimination and discrimination because of something arising in consequence of disability. He argued that he was the victim of a sham, there being no redundancy situation, and he was dismissed because of his disability.

Employment Tribunal

All three claims were rejected by the Employment Tribunal for the following reasons:

Direct discrimination

The Tribunal found that the Respondent did not treat and would not have treated someone without a disability any different from the way in which the Claimant was treated.

Unfair Dismissal

The Tribunal accepted that the dismissal related to redundancy and had been conducted fairly.

Discrimination because of something arising in consequence of disability

The Tribunal held that, although the Claimant’s sick leave had given the employer the opportunity to identify its ability to manage without him, this was not the same as saying that the Claimant was dismissed because of his absence. The Claimant’s absence was not an operative cause of his redundancy dismissal, it was merely the context which allowed the employer to identify a potential cost saving.

The Claimant appealed to the EAT.

Employment Appeal Tribunal

The EAT dismissed the Claimant’s appeal. It held that the Tribunal had correctly applied the two-stage causation test identified in Basildon & Thurrock NHS Foundation Trust v Weerasinghe:

  1. There must be “something” arising in consequence of disability; and
  2. The unfavourable treatment must be “because of” that “something”.

Mrs Justice Simler, President of the EAT, stated that provided the “something” is an effective cause (though it need not be the sole of the main cause of the unfavourable treatment) the causal test is established. Applying this to the case, she concluded that the Tribunal had been entitled to find that the Claimant’s absence was merely the occasion on which the Respondent was able to identify its ability to manage without the Claimant, not the effective cause of the Claimant’s dismissal.

What does this mean for employers?

This is a surprisingly employer friendly case which bucks the trend of recent case law which has often found only a loose connection between the “something” and the unfavourable treatment.

Whilst employees can ultimately be dismissed for long term sickness and mental ill-health absences, every case will depend on its own particular facts. The tribunal will analyse cases to determine whether the absence is merely part of the context for dismissal and those where it is an effective cause. Whilst this case is useful it should therefore be treated with caution.

It is vital for employers to clearly identify why they are dismissing an employee. If an employer realises that they can manage without a particular role during a period of ill health absence, they can potentially fairly dismiss in a non-discriminatory way, providing that they ensure a full and fair redundancy process is followed.

The decision to dismiss an employee should never be taken lightly and should not be seen as a green light to allow an employer to automatically dismiss an employee if they realise they can cope without the employee whilst the employee is off work due to illness, be that physical or mental.

As ever, if an employer wishes to dismiss an employee in such circumstances then they should seek specialist employment advice.

At Paris Smith LLP we have expertise in providing advice on discrimination and dismissal queries. Please contact a member of the Employment team if you have any questions relating to this article or any discrimination matter.

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