It's an all too common problem for employers: how to deal with the fair dismissal of an employee who has been absent from work for a prolonged period of time due to ill health. A recent Scottish Court of Session case, called BS v Dundee City Council, has provided welcome clarity on this difficult question.  John Moore looks at the details.

The background

An employee's lack of capability to do their job due to ill health may be a potentiality fair reason for dismissal (section 98(2)(a), Employment Rights Act 1996 (ERA)).

Once an employer has established a potentially fair reason for an employee's dismissal, the tribunal must decide if the employer acted reasonably in dismissing the employee for that reason. The determination of that question is set out in section 98(4) of the ERA and

  • 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
  • shall be determined in accordance with equity and the substantial merits of the case.

In addition to finding a potentially fair reason for dismissal, section 98A(2) also requires tribunals to consider the seriousness of any procedural defects when an employer dismisses.

The facts

In BS v Dundee City Council, an employee who was employed by Dundee City Council ('the Council') for 35 years was dismissed in September 2009 on grounds of capability.

At the time of his dismissal he had been off work for more than 12 months. This absence was initially caused by a foot injury but the reason for the absence changed after he was arrested in connection with an allegation made by a woman with whom he had been having an affair. The arrest triggered a nervous condition which then developed into depression and anxiety which caused him to remain off work.

During his absence the employee received counselling and was assessed by an occupational health service, which reported back to the Council on his condition at regular intervals. After receipt of each report, the Council would meet with the employee to review his progress.

At one of these meetings, in August 2009, the Council suggested a return date of 14 September 2009, which was the date that the employee's latest GP certificate was due to expire. The Council warned him that he would be at risk of dismissal, if he did not return to work on that date. Shortly afterwards, an occupational health physician reported that the employee's "health is improving" and that he should be able to return to work "within the next 1 to 3 months".

However, the employee did not return to work on the date specified by the Council and, at a subsequent absence review meeting, described himself as unwell and not ready to return to work. The Council decided to dismiss him and rejected his appeal against his dismissal.

Unfair dismissal proceedings were brought against the Council. An Employment Tribunal upheld the claim, finding that the Council had adopted an unfair procedure in dismissing him. In particular, the Tribunal criticised the Council for

  • making assumptions based on the employee's understanding of his condition rather than on medical advice
  • proceeding without "all the relevant facts" and
  • failing to take account the employee's long service.

The Council appealed and the Employment Appeal Tribunal (EAT) reversed the decision, finding that the Tribunal had placed too much emphasis on the principles of procedural fairness. The employee challenged the EAT’s decision and appealed to the Court of Session.

The decision

Although the Court of Session stated the Tribunal had placed too much weight on the employer’s failure to obtain further medical advice before dismissing, it preferred the Tribunal’s decision to that of the EAT. The case has now been sent back to the Employment Tribunal to be reconsidered.

In reaching this decision the Court of Session stated that in a case where an employee has been absent from work for a prolonged period due to sickness, the following issues should be specifically addressed.

  1. Whether the employer could be expected to wait any longer.
  2. Whether the employee had been consulted with, whether their views had been taken into account, and whether such views had been properly balanced against the medical professional's opinion.
  3. Whether reasonable steps had been taken to discover the employee's medical condition and likely prognosis.

The Court also pointed out that length of service is not automatically relevant. The "critical question", the Court held, when considering the weight to give to previous good service, "is whether the length of the employee's service, and the manner in which he worked during that period, yields inferences that indicate that the employee is likely to return to work as soon as he can".

What does this mean for me?

Whilst this case is not binding on Tribunals in England and Wales, they will certainly find it persuasive. Following on from this, the issues for consideration set out above provide a useful reminder to employers of the main questions to consider when deciding whether to dismiss an employee on ill health grounds. You may wish to take the above into account when training your managers and ensure that any relevant policies, procedures or guidance are amended to reflect the guidance set out in this decision.

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