Legal: Staying on the right side of the law

For some years now, the overwhelming majority of enquiries I have been getting from clients involve questions of managing ill-health, particularly staff who are absent with long-term medical conditions.

Often the conditions causing the absence relate to stress, anxiety, depression and other mental health issues. There does appear to be an epidemic of health-related problems in the UK workplace.

In discussing this matter, I think it is useful to cut to the chase and start with what the law says about unfair dismissal. A claim for unfair dismissal from someone who has been dismissed on the grounds of ill-health is the ultimate test of whether your procedures for managing ill-health are fair.

In most cases, an employee must have one year’s continuous employment to be eligible to bring a complaint of unfair dismissal. There are several exceptions to this rule, the ‘automatically unfair’ dismissals, which are in the main those claims involving some kind of discrimination, including disability discrimination. Claims for unfair dismissal can only go to the employment tribunal (formerly known as the industrial tribunal).

When an employee brings a claim for unfair dismissal, it is for the employer to show the reason for the dismissal. According to the provisions of Section 98 of the Employment Rights Act 1996, there are five potentially fair reasons for dismissal:

  • Capability
  • Conduct
  • Redundancy
  • Statutory Restriction
  • Some other substantial reason.

It will be obvious what ‘conduct’ and ‘redundancy’ dismissals are. A statutory restriction means that the employee is prevented by law from doing the job – for example, a driver who loses his driving licence. ‘Some other substantial reason’ means “Parliament can’t be expected to think of everything”.

The first three reasons are by far the most common reasons for dismissal. A dismissal for ill-health would be a ‘capability’ dismissal. As such, it is a potentially fair reason.

Once the employer has shown the reason for the dismissal, the next question to be considered is whether the dismissal was fair in all the circumstances. At this point, it is worthwhile actually looking at the provisions of Section 98 subsection 4:

  • “(4) Where the employer has fulfilled the requirements of subsection (1) (showing the reason for the dismissal), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –

    • (a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
    • (b) shall be determined in accordance with equity and the substantial merits of the case.”

So, despite the austere and impenetrable beauty of the parliamentary draftsman’s prose style, we can see that a dismissal will be fair if the employer acted reasonably in dismissing the employee for the reason given. If the employer acted reasonably, the dismissal will be fair: what is fair is that which is reasonable. Fair equals reasonable. It may be complained that this does not seem to get us very far.

The statutory provision, however, directing employment tribunals to have regard to the size and administrative resources of the employer’s undertaking, is much more important in dealing with capability dismissals than, say, misconduct dismissals. The larger the employer, the more will be expected of them before the dismissal will be held to be fair. A larger employer will have to fulfil all the fair procedural requirements of a dismissal, and in cases of capability, to look closely to see if alternative duties or alternative work practices can be found before dismissing. An employer with a small workforce may be allowed greater latitude before being held to have acted unreasonably, and hence unfairly. One law for the big employer, another for the smaller employer.

Capability dismissals
These usually arise in three sets of circumstances:

  1. Inability to perform the job either through incompetence or lack of qualifications
  2. A series of unconnected absences – for unconnected episodes of sickness or absence from work for personal reasons etc – which amounts to a failure by the employee to fulfil the terms of their contract of employment
  3. Long-term sickness

The procedures that require to be followed under paragraphs 1 and 2 above are similar if the dismissal is to be held as fair. A different set of criteria obtain when dealing with dismissal by reason of long-term sickness. We have been assisted by the courts over the years in the question of what is reasonable – and therefore fair – in an ill-health dismissal.

In Spencer v Paragon Wallpapers Ltd [1976] IRLR 373, the Employment Appeal Tribunal (EAT) stated: “In cases of ill health…usually, 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 work to be done and the employee’s need for time to recover his health.”

This is useful. As far back as 1976, the courts were emphasising the need for a discussion between the employer and employee. The EAT also notes the employer’s legitimate requirement to have the work in question done.

Further help came in the case of East Lindsey District Council v Daubney [1977] IRLR 181. In that case the court said:

“Unless there are wholly exceptional circumstances, before an employee is dismissed on the ground of ill health, it is necessary that he should be consulted and the matter discussed with him, and that in one way or another, steps should be taken by the employer to discover the true medical position. Discussions and consultation will often bring to light facts and circumstances of which the employers were unaware and which will throw new light on the problem.”

Again the need for discussion – consultation – is emphasised. This is the starting point for managing ill health. The case also states that it is essential for the employer to make reasonable inquiries to establish the true medical position.

These are the two golden rules for managing ill health: speak to the employee and discuss their absence, and get an appropriate medical report.

Although these cases are dealing with ill health in the context of a dismissal, the guidance given by the courts applies equally to managing ill health.

The meeting with the employee should explore the causes and effects of their absence and any suggestions that would assist their return to work.

The employer should be prepared to suggest any alterations to work practices (phased return to work, change of hours, change of duties, alternative available jobs) that would assist the employee in returning. The employee should be asked if they have any suggestions that would assist their return. The extent to which employers must make changes or offer alternative work is determined by “the size and administrative resources of the employer’s undertaking”.

Managers must deal with problems that commonly arise in these cases. An employee off with long-term ill health may object to being contacted by the employer. The employee may accuse the employer of harassment or of increasing the stress they are under. The employer, however, has a right to make reasonable contact with an employee. If the employee refuses to come to the office or works premises for a meeting, the employer should offer to meet with the employee at their house or at some other neutral venue.

If the employee is too stressed to deal with the employer’s queries, they should be asked to nominate a relative or representative to liaise with the employer. They should be advised that they have the right by law to be accompanied at any meeting by a colleague or trade union representative.

In an ill-health matter, I usually advise that the employee should be allowed to be accompanied by anyone they like. I don’t think this prejudices the employer in any way and if it makes the employee more relaxed about the meeting, all the better. The employer should advise the employee – as sensitively as possible – that a prolonged absence from work may lead to the employee’s dismissal.

The employer should obtain appropriate medical evidence. This can be from the employee’s GP or a specialist nominated by the employer. The medical practitioner consulted should be asked if they have any suggestions that would assist the return to work. If the employee refuses to comply with a request for medical evidence to be obtained, they should be advised that the medical input is required to assist their return and that refusal may constitute a disciplinary offence.

Depending on the circumstances, especially the duration of the employee’s absence, a series of meetings and a variety of medical reports may have to be obtained over a period of time before any decision can be made. The hope is that between consulting with the employee and obtaining medical evidence on the employee’s condition, a way to allow the employee back to work will be found.

Managers are sometimes, understandably, reluctant to meet with absent employees, to raise the issue of possible termination and ask for medical evidence to be obtained. As a result, they can be frozen by inertia and months go by without anything being done at all. This is fatal. The manager has a duty to manage. The management process should be started as soon as there is a reasonable expectation that the employee will be off for a significant period.

In any event, we can see from the cases quoted previously that consulting and obtaining medical evidence are what the law requires managers to do.

To sum up:

  • In all cases of ill-health absence, the employer must make reasonable investigations to establish the true medical position
  • The employee should be ‘cautioned’ at the earliest stage in the proceedings that termination of their contract by reason of ill health is a possibility
  • The employer should suggest any alterations to work practices that would assist the employee in returning. The employee should be asked if they have any suggestions that would assist their return. Any such suggestions should be carefully considered by the employer
  • The employee should be advised in writing of their rights under the Access to Medical Reports Act 1988 before information from their doctor is obtained. The employee has to give written consent to such information being made available.

In connection with long-term sickness absence (basically, sickness that lasts or is likely to last one year), the provisions of the Disability Discrimination Act (DDA) 1995 are of great importance.

For the purposes of this Act, a person is disabled and protected by the Act if they have a physical or mental impairment, which has a substantial and adverse effect on their ability to carry out normal day-to-day activities. There is no qualifying period of service under the Act and unlimited compensation can be awarded.

The employer must show that the dismissal in these cases was ‘justified’. In order to justify such a dismissal, the employer would have to demonstrate that they could not make reasonable adjustments to the employee’s working conditions, hours of work, job duties or place of work or obtain or modify equipment that would allow the employee to work on. The employer will therefore have to make enquiries into these areas to see if any steps can be taken before concluding that a dismissal would be held to be justified. The DDA imposes a higher standard of duty on an employer than previously.

Constructive dismissal
Under the Employment Rights Act 1996 s. 95 (1)(c), constructive dismissal occurs where “an employee terminates the contract under which he is employed (with or without notice) in circumstances such that he is entitled to terminate it without notice by reason of the employer’s conduct”. The employee is then treated as having been dismissed.

For an employee to be entitled to terminate their contract, the employer’s conduct must amount to a “fundamental breach of contract”. If an employer’ behaviour is so unreasonable that the relationship between the employer and the employee totally breaks down, it is likely that the employer will be in breach of the implied term of “mutual trust and confidence”.

A culmination of circumstances can entitle an employee to resign and claim constructive dismissal. The conduct by the employer that constitutes the ‘last straw’ may not have been enough on its own to justify the employee’s resignation, but added to previous acts by the employer, the cumulative effect may be that the employer is in fundamental breach of the contract of employment.

Constructive dismissal issues often arise during the management of ill-health absence. The employee may complain that the employer is doing nothing, or not enough, to assist them in returning to work. Conversely, the employee may complain that actions by the employer – asking for a meeting or medical evidence – constitute harassment.

If the employer, however, takes pains to advise the employee that the meetings and medical reports are sought as a way to assist the employee in their return to work and is attempting to conduct a constructive dialogue with the employee, it is unlikely that a constructive dismissal has taken place.

What I have outlined above is only a very general overview of the legal position. Expert advice should always be sought in any given set of circumstances.

Michael Lamont practices in Glasgow. For more information e-mail [email protected], or call 0141 333 9930

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