Employment Cases Update

Awan v ICTS UK Ltd [2018] UKEAT 0087/18/2311

Date published: 23/01/2019

Appeal against the dismissal of the Claimant's claim that dismissal while he was entitled to long-term disability benefits was unfair and was also an act of unlawful discrimination because of something arising from his disability. Appeal allowed and remitted to a fresh Tribunal.

The Claimant was dismissed for incapability after being absent for a long period of time. At the time he was dismissed he was in receipt of long-term disability benefits which would stop if his employment came to an end. It was common ground that at all material times the Claimant was a disabled person for the purposes of the Equality Act 2010. Further, it was common ground that the Claimant was dismissed for a reason relating to capability and that his dismissal was because of something arising from his disability. The questions for the ET were whether it was fair and/or a proportionate means of achieving a legitimate aim for an employer to dismiss an employee by reason of permanent incapability at a time when an entitlement to long-term disability benefits (whether or not underpinned by an insurance policy) had accrued or was accruing. The ET held that it was both fair and proportionate to do so, having rejected the Claimant's case that there was an implied term in his contract of employment restricting his employer's power to dismiss in those circumstances. The Claimant appealed.

The EAT allowed the appeal. They said:

... on a proper construction of the contract, it is contrary to the functioning of the long-term disability plan, and to its purpose, to permit the Respondent to exercise the contractual power to dismiss so as to deny the Claimant the very benefits which the scheme envisages will be paid.  ... a term can be implied whether on the officious bystander or the business efficacy tests of implied contractual incorporation 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."  That term is capable of clear expression, reasonable in the particular circumstances and operates to limit (rather than contradict) the express contractual right to terminate on notice by preventing the exercise of that right in circumstances where it would frustrate altogether the entitlement to long term disability benefits expressly provided for by the contract.

Read the full text of the judgment on Bailii