Long-term disability dismissal frustrates entitlement to benefits

Published on: 30/11/2018


In Awan v ICTS Ltd the EAT found an implied term that where an employee is contractually entitled to long-term disability benefits, they will not be dismissed for continuing incapacity. 

The Claimant had a contractual entitlement to a long-term disability benefit plan for the duration of his employment.  He was certified as unfit for work in October 2012 and remained unable to work for two years.  He therefore received benefits under the plan.   He was subsequently dismissed for on grounds of capability.

The EAT held that there was an implied term that while an employee is receiving long-term disability benefits, they will not be dismissed for continued incapacity to work.  The term therefore limited the employer’s right to terminate employment where it would frustrate the employee’s entitlement to the benefits under the contract.  The case was remitted to the Employment Tribunal to consider the reasonableness of the dismissal.

This is a reminder to employers managing ill health, to make sure they have identified and considered contractual entitlements before looking at any dismissal on capability grounds.


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