An employer may terminate the contract of an ill worker receiving claiming protection insurance benefits, a tribunal ruling confirms.
An employment appeal tribunal dismissed the claim of a former printing company director that he was entitled to money under income protection (formerly known as permanent health insurance) as well as other payments after he was dismissed because of ill health.
Instead, it found the employee had suffered no financial loss under the terms of the benefit and contrary to the former employee’s claims, there was no implied condition he would not be dismissed.
Allen and Overy senior professional support lawyer Felicity Gemson said the question of dismissing ill employees who qualified for cover had been a risk area for employers for quite some time, but the tribunal’s decision reinforced previous case law.
“The problem here was there was no clause which dealt with private health insurance benefits, it was basically a benefit the employee received outside the bounds of the contract, and that is dangerous.”
Employers should ensure qualifying employees have contracts which included an express right to the benefit, she added. “If you have an express right you are able to say the employee’s right to receive the IP benefit is subject to and in accordance to the scheme itself.
“By doing that you are ensuring you are not giving the employee a more generous contractual right to IP than would exist under the scheme.”
Known as Lloyd v BCQ Ltd, the case referred to a man who began working at a printing company in 1978. In 2007, he suffered a back injury and, with the exception of a few weeks, did not return to work before his dismissal in May 2011. He continued however to receive income protection (dubbed personal health insurance in court) payments up until his 60th birthday of December that year.
The Employment Tribunal which originally heard the case found BCQ’s decision to dismiss the employee was reasonable. It described his contention that the decision to end payment of the benefit at 60 was age discrimination “little short of absurd”, given 60 was the company’s target retirement date.
