Guide to Ill Health Dismissal and Dealing with Ill Health

Dealing with ill health issues is a very difficult area which requires employers to balance tolerance and understanding of the employee's problems with their business needs and requirements. It is a commonly held misconception that to dismiss someone due to their ill health is unfair provided the employee is genuinely ill. This is not the case. The facts need to be assessed on a case by case basis, but dismissals for ill health absence can be fair and reasonable if the correct procedures are followed.

The potentially fair reasons for dismissal under section 98 of the Employment Rights Act 1996 ("ERA") into which dismissals on the basis of ill health may fall are:

1. conduct - poor attendance;

2. capability; and

3. some other substantial reason justifying dismissal.

It is for the employer to show what was the reason, or if there was more than one, the principal reason for dismissal. It is then for the Tribunal to be satisfied that that was the reason for the dismissal and that the employer acted reasonably in all the circumstances of the case in treating that reason as a sufficient reason for dismissal. Note that for most purposes the employee will need one year's continuous service to bring a claim for unfair dismissal.

SHORT TERM PERSISTENT ABSENCE

The Courts and Tribunals have recognised that poor attendance by an employee may become a problem for employers. When the absences become commercially damaging, it may be necessary and reasonable to dismiss the employee concerned. Provided that the correct procedures are followed, the dismissal is likely to be fair.

A number of cases from the Employment Appeal Tribunal have laid down some useful guidelines. In particular, Lynock -v- Cereal Packaging Limited [1988] IRLR 5110 held that employers ought to take into account the following:

1. the nature of the illness;

2. the likelihood of it recurring or of some other illness arising;

3. the length of the various absences and the periods between them;

4. the need for the employer to have the work done;

5. the impact of the absences on other employees;

6. the importance of a personal assessment of the situation;

7. the importance of consultation with the employee; and

8. the importance of appropriate warnings of dismissal if there is no improvement.

In assessing the fairness of a dismissal, the Tribunal will normally expect an employer to investigate the facts, and in particular to review the attendance record and the reason for the absences. Patterns of absences and their frequency may also be relevant.

The ACAS handbook on discipline at work advises employers to make sufficient enquiry into the reason for the employee's absence before taking any decision to dismiss.

COUNSELLING AND WARNINGS

In the Lynock case, the Employment Appeal Tribunal recommended that employers conduct a counselling interview in the first instance to try to assess the reasons for the employee's absence. In most cases of persistent, short term absences, they are genuine absences due to ill health, often with unrelated symptoms. The purpose of the counselling should be to try to ascertain whether there is an underlying reason for the ill health and to try to identify situations where the absence is not genuinely due to ill health.

The Employment Appeal Tribunal in Lynock drew a distinction between the type of disciplinary warnings issued in cases of misconduct and the type of warnings to be issued in the case of genuine but disruptive intermittent absence. Wood J stated:

"What is important is that employers should treat each case individually where there is genuine illness and with sympathy, understanding and compassion. The jargon of industrial relations in terms of "warnings" is not really the purpose of system operated by the employer; it is to give a caution that the stage has been reached where with the best will in the world, it has become impossible to continue with the employment."

The Tribunals have stressed how important it is for employers to let the employee concerned know that the level of absenteeism is unacceptable. The employee should also be told that his absence record must improve and how and in what time frame this must occur. The employee should also be warned of the consequences if he or she does not do so.

Employers must consider the employee's explanations for any absences. It will be essential for the employer to interview the employee, show him or her the attendance record and listen to any explanations. There may be a number of underlying reasons masking the real reason for the excessive absence and the employer should try to identify what the real problem is. Examples of underlying problems include:

1. an undiagnosed medical condition;

2. a personality clash at work with either a colleague or supervisor;

3. some problem with the work itself, eg, too stressful;

4. some domestic or family problem;

5. some personal problem, eg, alcohol or drug dependency or financial problems;

6. malingering; or

7. moonlighting.

IMPROVEMENT IN ATTENDANCE

On factor which will influence whether the decision to dismiss was fair will be the degree of improvement in attendance made by the employee following warnings. It may be reasonable to extend the final warning where a substantial improvement has been made but the required standard has not yet been reached.

In Newalls Insulation Co. Limited -v- Blakeman [1976] IRLR 303, the Employment Appeal Tribunal suggested that if the employee's attendance improves after a final warning has been given, then another warning may be appropriate if attendance falls below the acceptable standard. However, where there has been no improvement in the employee's attendance following a final warning, then probably no further warning will be necessary.

As a matter of good management practice, it may be sensible to praise an employee who has achieved an acceptable attendance record following a warning and exhorting him or her to maintain the good record.

IS MEDICAL EVIDENCE NECESSARY?

In the Lynock case, the Employment Appeal Tribunal recognised that in the case of short term absences, medical reports may be of little value. Often, by the time that the report is obtained, the medical condition may well have disappeared. However, where a number of absences are for the same or related illnesses, it may be prudent to get a medical report.

RIGHT OF APPEAL

If an employee is dismissed due to persistent ill health, it is essential that they are given the opportunity to appeal against the decision. Wherever possible, the appeal should be heard by someone who was not involved in the original decision to dismiss.

LONG TERM OR CHRONIC SICKNESS ABSENCE

The dismissal of an employee who is absent from work due to ill health or long term is potentially fair as the dismissal will be by reason of capability (section 98 ERA). The statutory definition of capability expressly provides that it includes reference to a person's health.

THE DECISION TO DISMISS

The decision whether or not to dismiss an employee on the basis of their continued ill health is a management decision for the employer and not a medical decision. (W.M. Computer Services Limited -v- Passmore [1988] EAT 721/86). However, the medical evidence will of course be an important factor in any decision to dismiss.

PROCEDURE FOR HANDLING LONG TERM SICKNESS ABSCENCE

In dealing with cases of chronic or long term illness there is clearly going to be an underlying medical condition causing the absence. That condition clearly effects the employee's ability to do the job, and may also amount to a disability within the meaning of the Disability Discrimination Act 1995 ("DDA").

For a dismissal to be fair, there are three essential steps which an employer must follow. These are:

1. the employer should endeavour to ascertain the true medical position and prognosis;

2. the employer should consult with the employee; and

3. the employer should consider any suitable alternative employment.

ASCERTAINING THE MEDICAL POSITION

In order to ascertain the medical position, the employer will need to obtain a medical report from the employee. This can either be from the employee's own doctor or from a doctor of the employer's choice. In order to obtain a medical report, the employee must give his or her consent under the provisions of the Access to Medical Reports Act 1988. This Act gives the patient the right to see any medical reports prepared by the doctor.

When requesting consent from the employee, the employer should explain to the employee why the report is being requested. If the employer has its own nominated doctor, it is common for the employer's nominated doctor to seek the report from the employee's doctor or the consultant who is to undertake the examination. It is essential that it is explained to the person preparing the report the nature of the employee's job, the job duties and the reason for the enquiry. The doctor should be asked for an opinion on the employee's medical condition at that time, their suitability to do the job given that condition and a likely date when they will be fit to return to their job.

If the employee refuses to consent to the employer obtaining a medical report, then, provided the employer has explained to the employee why it needs the report, the employer will have to make the decision to dismiss on the medical evidence it has available to it. The employer will still have to show, albeit without the benefit of a medical report, that the employee was incapable of performing his or her duties and that it was unreasonable for the employer to wait until the employee had recovered (Petch -v- Department of Health and Social Security (EAT 851/86).

THE MEDICAL REPORT

With luck, the medical report will give a clear indication of the employee's condition and a clear prognosis on his or her future health. However, in practice, many medical reports are vague as to the timing of the employee's likely return to work. In this situation, the employer may seek a further medical opinion, or alternatively make any decision based on the information available to it to that date. Factors which will influence this decision include the length of absence to date, the size and resources of the employer and the effect of the employee's continued absence on his or her colleagues.

PERSONAL CONSULTATION WITH THE EMPLOYEE

Warnings are not appropriate in cases of long term ill health, but it is essential that the employer consults with the employee throughout the absence, and in particular before any decision is made to dismiss. In Spencer -v- Paragon Wall Papers Limited [1976] IRLR 373, the Employment Appeal Tribunal stated that:

"Warnings are inappropriate. What is needed is a discussion of the position between the employer and the employee, so that the situation can be weighed up, bearing in mind the employer's need for the work to be done and the employee's need for time recover his health. Matters to be taken into account are the nature of the illness, the likely length of the continuing absence, the need of the employer to have the work done and all the circumstances of the case."

The importance of consultation was emphasised by the House of Lords in Polkey -v- A. E. Dayton Services Limited [1987] IRLR 503.

SUITABLE ALTERNATIVE EMPLOYMENT

One of the purposes of consultation is to ascertain whether the employee may be capable of undertaking suitable alternative employment. In particular, where an employee has a temporary disability, the employer will be expected to consider making minor modifications to the original job in order to facilitate the employee's return to work. This is in addition to the requirements under the DDA to make reasonable adjustments (see below).

However, employers will not be expected to create a vacancy especially to facilitate the employee's return (East Lindsay District Council -v- Daubney [1977] IRLR 181).

Employers should also consider offering employees lower paid employment as an alternative to dismissal. In Merseyside and North Wales Electricity Board -v- Taylor [1975] IRLR 60, a decision to dismiss where there was lower paid employment available was held to be unfair. The employer's argument that it assumed that the employee would not have wanted the lower paid work was rejected. The decision should have been the employee's, not the employer's.

DISABILITY DISCRIMINATION

Employers should be aware of the additional burdens imposed by the DDA. They apply where the employer has at least fifteen employees.

The DDA defines a person as being disabled if that person has a "physical or mental impairment which has a substantial long term adverse effect on their ability to carry out normal day to day activities". For this purpose, long term means a likely minimum of one year or the person's life expectancy if shorter.

A person discriminates within the meaning of the DDA if he treats a person less favourably for a reason which relates to the disabled person's disability than he would treat others to whom that reason does not or would not apply. On the face of it, this means that any dismissal due to a person's disability will amount to discrimination.

However, the DDA does provide for a defence of justification (section 5 DDA). In applying the test of justification, the Employment Appeal Tribunal have held that the interests of the disabled person and the interests of the employer must be weighed in the balance, so that all the circumstances of the case are considered and not simply the justification proffered by the employer (Baignton -v- Saurus General Engineers Limited [1999] IRLR 604).

Section 6 of the DDA requires employers to make reasonable adjustments to the arrangements for the disabled employee to facilitate their disability.

The adjustment may be to the physical features of premises, for example, the positioning of furniture or fixtures and fittings, to the work itself or to the hours that the employee is required to work. The DDA only requires that the employer is required to take such steps as are reasonable in all the circumstances.

Employers should note that one of the most common failings in this area is for employers to assume that no reasonable adjustments can be made, or even not to consider the question at all. Before reaching the conclusion that no reasonable adjustments can be made, employers should consult with the employee and also with any organisation specialising in helping people with the particular disability, eg, RNIB.

Note that under the DDA employees are protected without the need for any period of continuous employment.

Relationship between dismissal and sick pay provisions

The fact that an employee has not used up his or her entitlement to contractual or statutory sick pay at the time of their dismissal does not necessarily mean that the dismissal is unfair (Coulson -v- Felixstowe Dock and Railway Co. [1975] IRLR 11). However, it will be a factor to be taken into account by a Tribunal.

Relationship between ill health dismissals and permanent health insurance scheme

The dismissal of an employee in receipt of benefits under a permanent health insurance scheme may constitute a breach of contract. In the case of Aspden -v- Webbs Poultry and Meat Group (Holdings) Limited [1996] IRLR 521, the Court implied a term into Mr Aspden's contract to give effect to the permanent health insurance scheme under which he benefited. The permanent health insurance scheme required Mr Aspden to remain an employee and provided that if he did, he would be entitled to benefit from the scheme if he was prevented from work by reason of sickness or incapacity. The contract also provided an express term that the employer could terminate the employment after six months' ill health absence. The Court implied a term to the effect that Mr Aspden could not be dismissed while he was benefiting from the scheme (save for gross misconduct), for such a dismissal clearly would nullify the permanent health insurance scheme.

Does ill health frustrate the contract?

Frustration occurs when, through the fault of neither of the parties to a contract, the contract was brought to an end through a supervening event which was not in the contemplation of the parties when they entered into the contract. The supervening event must make the contract impossible to perform, or radically different from the original contract.

The benefit of frustration from the employer's point of view is that where there is frustration of the contract, there is no dismissal and therefore the employee has no right to claim unfair dismissal. The Courts have become conscious of this and in Williams -v- Watsons Luxury Coaches Limited [1990] IRLR 164, the Employment Appeal Tribunal set out the following principles as being relevant to the application of frustration to contracts of employment brought to an end due to ill health:

1. Tribunals must guard against an easy application of the doctrine of frustration;

2. it will normally be necessary to decide the relevant date in order to determine whether there is a frustrating event;

3. factors such as the length of previous employment, how long the illness was going to last, and the employer's requirement for the person to return to work should always be taken into consideration; and

4. the employer should not be allowed to rely upon frustration if the ill health was caused by that party, eg, industrial accident.

PREGANCY RELATED SICKNESS AND ABSENCE

Any dismissal of an employee due to her pregnancy will be automatically unfair (section 99 ERA). This is so irrespective of the employee's length of service. Such a dismissal is also likely to be sex discrimination.

Problems can arise in determining whether or not the ill health is a reason connected with the pregnancy of the employee. However, in Caledonia Bureau Investment and Property -v- Caffrey [1998] IRLR 110, the Employment Appeal Tribunal stated that the general aims of the special provisions protecting pregnant employees should be interpreted in a manner which was consistent with a woman's right to bear children. From this view point, the Employment Appeal Tribunal upheld a decision that a dismissal for depression was automatically unfair under section 99 ERA as it was post natal depression.

Note that a woman's right to postpone her return to work after maternity leave on the grounds of her ill health is no longer available. Under the Maternity and Parent Leave etc Regulations 1999 if the employee is ill at the end of her maternity leave she is deemed to have returned to work and the normal rules of sickness relating to sick pay will apply. However, if the on-going ill health is pregnancy related, the woman will continue to benefit from the protection of section 99 ERA.

If you have any queries, please contact any member of the Employment Unit.

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Please note that this guide is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.