Dismissing an employee due to ill health is anything but straightforward.  An employer will often need to consider complex assessments of medical evidence, potentially pry into an employee’s private life, and deal with the prospect of taking someone’s livelihood away at a time in their life when they are most vulnerable.  Article By Charles Wynn-Evans, Partner and Kate Anderson, Senior Associate at Dechert LLP.

Further complications, although outside the scope of this article, present themselves with permanent health insurance and disability discrimination.  Should the employer wait to see if the employee qualifies for insurance before dismissing?  Should it wait until the employee has exhausted the appeal process with the Financial Ombudsman?  Are adjustments required under the Equality Act 2010?  Leaving those issues aside, it is clear that weighing all of these factors against the employer’s need to manage its business results in a tricky balancing act that must be undertaken. We should therefore be grateful for the recent decision of the Scottish Court of Session in BS v Dundee City Council (2013) CSIH 91 which although not, strictly speaking, binding on Employment Tribunals in England and Wales, provides some very welcome guidance in relation to this difficult exercise.

So when will a dismissal for ill health be fair?  Assuming that the employer can demonstrate that capability is the reason for dismissal, it must then follow a fair procedure.  Unsurprisingly though, what constitutes a fair procedure for ill health dismissals is more complex than it is for, say, misconduct or redundancy.  However, case law has established that it requires three key elements: (1) obtaining medical evidence, (2) consultation and (3) considering alternative employment.  As for reasonableness, a number of factors should be taken into account, including the employee’s length of service, the effect of their absence on the workforce, the requirement for the role to be performed, the likelihood of the employee being able to return to work and the nature of their illness.

In this case, the circumstances which led to the employee’s dismissal tell a sad tale.  He had 35 years’ service when he developed a problem with his foot and took some time off work.  Whilst absent, he was charged with a criminal offence following a complaint made about him by a woman with whom he was having an affair.  The charge was later dropped, but led to him separating from his wife and being signed off work with depression and anxiety.  The Council referred him to Occupational Health advisers, but they proved to be unhelpful, and each Occupational Health report was almost identical. 

After six months’ absence, the Council found out that he had been charged with a criminal offence and suspected that was the reason for his absence.  This led to a disciplinary meeting and, although the disciplinary charges were later dropped, the resulting humiliation led to a significant setback in his recovery. When he next met with the Council, he told them he was taking sleeping tablets and antidepressants, and could not envisage returning to work whilst on medication.  The Council asked him to return to work a month later and explained that they would consider his dismissal if he did not.  He was given the opportunity to appeal against this decision but chose not to. A few days before his proposed return, he met with a doctor appointed by Occupational Health.  The doctor concluded that his health was improving, he was not a candidate for ill-health retirement and he should be able to return to work within one to three months (although this was subject to his GP signing him off as fit for work).

However, he did not return to work on the planned date and at his next meeting with the Council said that he did not feel any better or further forward since the last meeting.  There was no discussion about obtaining a final certificate from his GP.

Following that meeting, the Council decided to dismiss.  It concluded that the doctor’s opinion (that he would be fit to return within one to three months) was conditional upon his GP certifying him as fit to return, but that he himself gave no indication that he might return.  He had been absent from work for over a year, the decision to dismiss had been deferred on five previous occasions, and they could not wait any longer.  His appeal against the decision was unsuccessful.

The Employment Tribunal found that the dismissal was unfair due to a number of defects with the procedure.  Key to its conclusions were the following findings:

1: The reliance of the Council on the “perfunctory” reports of Occupational Health was not within the range of ways in which a reasonable employer might have informed itself. 

2: No reasonable employer would have dismissed the employee only nine days after receiving the indication from Occupational Health that he would be fit to return to work in one to three months. 

3: In the absence of any medical evidence, there were no reasonable grounds for the Council’s belief that he employee was unlikely to return to work in the foreseeable future.

4: Since there was an inconsistency between the medical advice and the employee’s own understanding of his medical condition, no reasonable employer would ignore the advice and dismiss an employee with 35 years’ service without first clarifying the true medical position.   

Court of Session Decision

The Court of Session found that the Employment Tribunal’s decision was lacking in four material respects – the tribunal:

(1)        Did not expressly address the question of whether the employer could be expected to wait longer before dismissing.

(2)        Did not give adequate weight to the employee’s own view about his ability to return to work, which should have been weighed against the doctor’s opinion.

(3)        Attached too much weight to the importance of obtaining a further medical opinion.

(4)        Should have considered whether the employee’s length of service was relevant.

The Court of Session decided to remit the case back to the same tribunal to consider those four issues. 

Key Principles

The Court of Session summarised the four main principles relating to the fairness of ill health dismissals as follows:

It is essential to consider the question of whether the employer could be expected to wait longer before dismissing.  There is a balancing act to be performed between the ability of the employer to wait, for example, because they could obtain temporary labour and because the employee has exhausted contractual sick pay, and the unsatisfactory state of affairs for an employer (and the costs associated with) having an employee on long-term sick leave. 

There is a need properly to consult with the employee prior to dismissal.  This can either work for or against the employee.  If he says that he will be able to return to work in the near future, it works in his favour.  If he says that he is no better and does not know when he will be able to return, it works against him.   

The employer must take steps to discover the employee’s medical condition and his likely prognosis.  However, this only requires the employer to obtain proper medical evidence and to ensure that the correct questions are asked and answered.  The obligation is only to take such steps as are sensible in the circumstances. 

(4)        Finally, the employer should address the question of length of service in every case.  That is whether length of service, and the manner in which the employee worked during that period, indicates that he is likely to take steps to return to work as soon as he can.

This decision provides a useful summary of how Employment Tribunals should approach ill health dismissals in accordance with the current EAT case law.  Employers should therefore bear the four principles above in mind when faced with dismissing an employee who has been absent from work for some time due to ill health.