First Leeds v Haigh
The law says that employers have to act reasonably when deciding whether to dismiss an employee. If they don’t, the dismissal will be unfair.
In First Leeds v Haigh, the Employment Appeal Tribunal (EAT) said that it was unreasonable for an employer not to ascertain whether their employee was entitled to ill-health retirement before dismissing him.
Basic facts
Mr Haigh, who had worked as a bus driver for 30 years, had a suspected stroke in June and again in October 2005.
Under the company’s pension scheme, he was entitled to retire early if he could show he was permanently incapacitated. The only other alternative was to go onto a “holding register” which preserved his continuity of employment but which meant he could not claim sick pay.
Mr Haigh was initially placed on the holding register, but was dismissed with effect from February 2006 despite a lack of medical evidence that he was permanently incapacitated. He appealed that decision and was referred to the occupational health doctor who felt his condition was not permanent.
However, at a final appeal and before the company received medical evidence from his specialist, it gave Mr Haigh a choice. It said that he could either continue to receive sick pay until May 2006 and then retire at 60 or he would be dismissed. Either way he could not apply for ill-health retirement. Mr Haigh refused the company’s terms and was dismissed.
Tribunal decision
The tribunal said that the company’s decision to dismiss Mr Haigh was driven mainly by a desire to avoid the cost of a claim for ill-health retirement, and not to find a fair outcome for their employee.
It concluded that the company was determined to foist a solution on Mr Haigh despite the fact that it did not know at the date of his dismissal whether his condition was permanent or not, as it had not waited for all the relevant medical evidence. The dismissal was therefore unfair.
EAT decision
And the EAT agreed, saying that “The question for the Tribunal, on which it rightly concentrated, was whether it was reasonable for the Company to dismiss when and how it did – forcing Mr Haigh to choose between dismissal or forgoing any right to claim an ill-health pension, and without waiting for a report on the question whether he was permanently incapacitated. “
As a general rule, it said that employers should take reasonable steps to consult employees on long term sick leave before dismissing them. For instance, by obtaining medical evidence and considering alternative employment.
Specifically, however, if an employer provided an enhanced pension on grounds of ill health (as in this case), they would “also be expected to take reasonable steps to ascertain whether the employee is entitled to the benefit of ill health retirement.”
In this case, that included referring Mr Haigh to an occupational health doctor for a decision, given that entitlement to the benefit was dependent on a certificate signed by a medical advisor.
The EAT said that employers who offer such enhancements to employees should not be allowed to stop them from claiming it whether “carelessly, arbitrarily or even deliberately. It may be that the employee would have a common law claim against the employer; but that is no substitute for proper consideration of the matter by the employer before dismissal.”