In ICTS (UK) Limited v Visram, the EAT has upheld a Tribunal’s decision to award compensation for loss of a long term disability benefit (‘LTDB’) on the basis it would continue until the Claimant’s death or retirement.
Mr Visram’s contract of employment entitled him to a LTDB, which would pay two thirds of his salary during an illness. The relevant policy wording confirmed that payment would “continue until the earlier date of your return to work, death or retirement”. Entitlement to the LTDB was conditional on Mr Visram remaining employed by ICTS.
Mr Visram suffered from work-related stress and depression and, after a long term absence, was dismissed by ICTS on 14 August 2014 on the grounds of medical capability. His Employment Tribunal claims for unfair dismissal and disability discrimination were successful.
On the issue Mr Visram’s entitlement to compensation, ICTS argued that following his termination, he was only entitled to the LTDB until he was able to ‘return to work’ at any suitable full-time position; his compensation should, therefore, be limited. The Tribunal’s decision, which was upheld by the EAT, was that the policy wording should have a narrower interpretation and Mr Visram’s entitlement to the LTDB should continue until he was able to return to the position from which he had been dismissed (i.e. his role with ICTS). As the parties had agreed Mr Visram would never be able to return to that job, he was therefore entitled to receive the LTDB until retirement or death, as the case may be.
Nicola Butterworth comments:
"This case is a further example of where the courts have found in an employee’s favour when determining entitlement to contractual benefits, in circumstances where the policy document covering the entitlement was ambiguously drafted. It also illustrates the potential exposure caused by having poorly drafted contracts and staff handbooks. Employers should have their template contracts and handbooks reviewed regularly to ensure such issues are avoided. If you require any assistance please contact a member of our team."
Alternatively, please navigate to our dedicated Employment & HR page for more information.
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