ICTS (UK) Limited v Visram

The Employment Appeal Tribunal (EAT) upheld the Employment Tribunal’s decision that an employee, who was successful in his claims for unfair dismissal and disability discrimination, should be awarded compensation for loss of benefits until death or retirement.

Facts

Mr Visram went on sick leave with work-related stress and depression. Mr Visram’s contract entitled him to the benefit of an insurance-based ill-health scheme which would pay him a proportion of his salary during an illness, however, entitlement under the scheme was conditional on Mr Visram remaining employed.

While Mr Visram was on sick leave, his employment TUPE-transferred to ICTS. Mr Visram’s employment was terminated by ICTS on capability grounds due to his lengthy sickness absence. As a result, Mr Visram submitted claims of unfair dismissal and discrimination arising from disability at the Employment Tribunal. My Visram was successful in both of his claims.

The Employment Tribunal considered how much compensation Mr Visram should be awarded and held that Mr Visram was entitled under the terms of his employment contract to receive disability benefits from ICTS until he “returned to work” to the role he conducted before he went on sick leave. As there was no prospect of Mr Visram ever being able to return to his role it was held that Mr Visram should be compensated for loss of benefits until death or retirement.

ICTS appealed to the EAT.  The EAT dismissed the appeal, and agreed with the Employment Tribunal that ‘return to work’ as set out in the contract meant return to the work which Mr Visram had done before he went off sick, not return to any work.

Comments

The case highlights that in any TUPE transfer situation it is vital to check, identify and understand the incoming employees’ rights under their contract of employment before any action is taken in regards to the employee. Also, when managing a disabled employee who is in receipt of disability benefits, it is important to review the terms on which those benefits are made available to understand the potential risks and liabilities.  The Courts and Tribunals will often imply a term limiting the right of an employer to dismiss if the effect is to deprive the employee of ongoing sickness benefits. Employers should review the terms of their employment contracts, also making sure that there are no inconsistencies between the contract and the terms on which benefits, especially insurance based benefits, are provided.

For more information or if you have any questions, please contact a member of the Hempsons Employment Team.