JUST BENEFITS

Sheffield Forgemasters International Ltd v Fox and Telindus Ltd v Brading

Anyone who succeeds in a tribunal claim for unfair dismissal or discrimination is entitled to compensation that is “just and equitable”. In the combined appeals of Sheffield Forgemasters International Ltd v Fox and Telindus Ltd v Brading, the Employment Appeal Tribunal (EAT) said that incapacity benefit claimants are also entitled to loss of earnings even if the two periods overlap.

Basic facts

Having succeeded in their claims for disability discrimination (Fox v Sheffield Forgemasters) and unfair dismissal (Brading v Telindus Ltd), both claimants were awarded compensation for loss of earnings.

The tribunal reasoned that they would have received the earnings had they not been discriminated against or unfairly dismissed.

Arguments on appeal

The employers appealed against these decisions to award compensation, arguing that if the claimants were in receipt of incapacity benefit and therefore “incapable of work” they could not also be eligible to receive damages for loss of earnings at the same time. That is, unless they could show that their incapacity was down to the employers’ unlawful conduct, which they disputed.

The claimants, however, argued that the phrase “incapable of work” had a special meaning in the legislation and did not “necessarily coincide with or equate to an individual’s actual inability to work”.

Statutory provisions

The 1992 Social Security Contributions and Benefits Act lays down two tests for incapacity benefit:

• During the first 196 days, the test is whether the claimant can do the work they would “reasonably be expected to do in the course of the occupation in which he was so engaged”, known as the “own occupation” test
  The test for the second period is a personal capability assessment which involves doing an assessment of the claimant’s physical fitness

EAT decision

The EAT agreed with the claimants. With regard to the first test, it pointed to a number of exemptions in the statutory provisions which have the effect of deeming somebody “incapable of work” when, in fact, they are quite capable of working and indeed, may even be working (such as someone working as a volunteer).

Mr Fox, for instance, found work at Bassett’s sweet factory one day per week and subsequently worked 40 hours per week as a volunteer even though he was in receipt of incapacity benefit at the same time.

With regard to the second test, the EAT said that even though someone scores the required number of qualifying points, that does not mean they are incapable of work. For instance, even if they cannot “walk up and down a flight of 12 stairs” or “bend to touch his knees and straighten up again”, they may still be able to carry out a wide variety of jobs.

It followed therefore, said the EAT, that many people who are deemed “incapable of work” and entitled to incapacity benefits are people who are able to work and are therefore entitled for the same period to compensation for loss of earnings.

The EAT concluded that the deeming provisions in the benefits legislation which deem a person “incapable of work” do not therefore “automatically and necessarily mean that they are actually physically incapable of working”. That is why tribunals must consider all the evidence before deciding if the person would have earned any money in a period for which they are claiming compensation.