The EAT in Awan v ICTS has held that there was an implied term in an employment contract requiring the employer not to dismiss the employee by reason of ill-health capability if that would result in the employee no longer being entitled to long-term disability benefits.
Mr Awan was employed by American Airlines and, in accordance with his employment contract, was entitled to benefit from a long-term disability benefit plan subject to remaining in employment. Mr Awan suffered from depression and as a result, went on long-term sick leave for two years. During that period, American Airlines outsourced Mr Awan’s role to ICTS pursuant to Transfer of Undertakings (Protection of Employment) Regulations 2006. Mr Awan was subsequently dismissed by ICTS on the grounds of ill-health capability.
The Tribunal held that ICTS was not prevented from dismissing Mr Awan whilst he was entitled to receive benefits, and as a result his dismissal was fair. His dismissal was also a proportionate means of achieving a legitimate aim and therefore not discriminatory.
On appeal, the EAT disagreed and found it was contrary to the purpose of the long-term disability plan to allow ICTS to dismiss Mr Awan for ill-health capability. On the facts of the case, the EAT found it appropriate to imply a term into the employment contract preventing such a dismissal. The EAT remitted the case to a fresh tribunal to address the questions of whether (taking into account the implied term) the dismissal was fair and whether it was a proportionate means of achieving a legitimate aim.
Nicola Butterworth comments:
“Whilst not establishing any new legal principles, this case serves as an important reminder of the additional obligations placed on employers in circumstances where their employees are entitled to permanent health insurance or similar benefits. Furthermore, it may be possible to mitigate the impact of this judgment by careful drafting of contracts of employment. If you would like any further advice, please get in touch with a member of the team.”
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