Catherine Scrivens looks at the rights of workers on long-term sick leave and sets out the procedures employers should follow before dismissing employees in these circumstances

Just because someone is on long-term sick leave does not necessarily mean they are disabled.

However, in the current economic climate, employers may well move to implement capability / ill health procedures more quickly than they would otherwise under the disability provisions of the Equality Act 2010 and the Employment Rights Act 1996 (ERA).

When an employee is absent on grounds of ill health, employers usually invoke a formal procedure – either their absence management policy or disciplinary policy. These may ultimately lead to dismissal on grounds of medical capability or ill health.

If they do so, the employer should consider at that point whether the employee is disabled. In other words, whether they have “a physical or mental impairment that has a substantial and long term adverse effect on their ability to carry out normal day to day activities”.

Dismissal because of long-term absence through ill health

Long-term absence through ill health is a potentially fair reason for dismissal under the provisions of section 98(3)(a) of the ERA. This relates to the employee’s capability to do the work they were employed to do.

Generally, in the absence of a catastrophic illness or accident, this will necessitate a process of consultation with the employee; a thorough investigation of the up-to-date medical condition and prognosis; and consideration of other options apart from dismissal.

For the procedure to be fair, the employer needs to have discussions with their employee at regular intervals. They also need to make sure the employee understands at what point dismissal may be an option.

This should involve personal contact between the employer and the employee. In addition, the employer should obtain up-to-date medical evidence from the employee’s general practitioner and, if appropriate, their hospital consultant.

Their discussions should also include a look at what steps the employer could take to get the employee back to work including any adjustments that may be necessary; and, where the employee is not in a position to return to their substantive position, thinking about alternative jobs.

When the employer is responsible for the employee’s ill health, it may be necessary to “go the extra mile” in terms of finding alternative employment for them, or putting up with a longer period of absence than might otherwise be reasonable, as in the case of McAdie -v- Royal Bank of Scotland (weekly LELR 30).

If it seems that the employee is unlikely to return to work, the employer should consider any contractual entitlements and benefits to which they may be entitled before dismissing them, in particular enhanced ill health benefits (First West Yorkshire Ltd t/a First Leeds -v- Haigh).

In CFS Management Services Ltd -v- Thomas, the Employment Appeal Tribunal (EAT) held that it was unreasonable for an employer to rely on an expert’s medical advice to argue that an employee was fit for work for the purposes of health insurance protection while at the same time dismissing the employee on the basis that he was unfit for work.

This, said the EAT, was “seeking to ride the same horse… in two different directions”.

If the employee is disabled, they are entitled to greater protection in terms of the employer’s obligations to consider and make reasonable adjustments that may include modifications of attendance policies and redeployment opportunities.

Modification of policies

As part of the duty to make adjustments, employers may have to modify or be more flexible in applying their attendance policies to discount absences arising from disability.

However, the EAT held in Royal Liverpool Children’s NHS Trust -v- Dunsby that there is no rule that an employer, when operating a sickness absence procedure, must discount disability-related absence.

It also held that the Disability Discrimination Act (in force at that time) did not mean that employers could not dismiss an employee who was absent either wholly or in part because of a reason related to their disability.


When a disabled employee is absent because they can no longer continue in their substantive position through ill health or injury, employers should consider redeployment as an alternative to dismissal if they are fit to work in some capacity.

This will ultimately depend on whether there are vacant positions. The leading case remains that of Archibald -v- Fife Council (LELR issue 92) in which the House of Lords (now the Supreme Court) determined that, in certain redeployment circumstances, disabled employees may be treated more favourably than non-disabled employees.

Their Lordships stated that the duty is triggered when it becomes apparent that the employee can no longer satisfy the requirements of their job description.

This case confirmed that the duty to make adjustments entails a degree of positive discrimination. In cases of long-term absence, redeployment will arise where the employee is fit to work but not in their substantive role.

While it is generally the case that employers are not required to create a post where one does not exist, this may be a reasonable adjustment when there has been a complete reorganisation or restructure, as in Southampton City College -v- Randall.
In this case the EAT ruled that the legislation did not preclude creating a new post in substitution for an existing vacant post.

But, in practice, these situations are likely to be limited.

Phased return

When an employer dismisses an employee rather than allowing them to make a phased return following an absence arising out of their disability, this may constitute a failure to make adjustments on the basis of that refusal, as in the case of Fareham College -v- Walters (weekly LELR 131).

However, the EAT said in Salford NHS Primary Care Trust -v- Smith that this did not extend to rehabilitative work and career breaks.


Following the decision of the Court of Appeal in O’Hanlon -v- HM Revenue and Customs Commissioners (weekly LELR 12) employers do not have to provide more generous sick pay for disabled employees, except in exceptional circumstances.

This judgment does not conflict with the earlier Court of Appeal decision in Meikle -v- Nottinghamshire County Council (LELR Issue 93) which held that it would be a reasonable adjustment to extend the provision of sick pay after the employee had exhausted her contractual entitlement, as her extended absence had been due to the employer’s failure to make adjustments.

Holiday pay

Following the decision in the long-running working time case of Stringer and ors -v- HM Revenue and Customs (weekly LELR 105), the Court of Justice of the European Union (CJEU) ruled that workers should be given the opportunity to take their leave even if they were off sick.

The Court also held that workers were entitled to be paid for any accrued but untaken leave on termination of their employment.

However, when the case returned to the House of Lords (weekly LELR 120), HMRC conceded the claimants were entitled to holiday pay, which meant that the position relating to the carry-over of leave into the next leave year remained undecided. Under Regulation 13(9) of the working time regulations, leave “may only be taken in the leave year in respect of which it is due”.

This ambiguity has now been resolved by the Court of Appeal in the case of NHS Leeds -v- Larner.

It decided that, regardless of whether a worker is employed by a public or private employer, if they are unable or unwilling to take the four weeks annual leave conferred under the regulations, they must be able to take it at another time and if necessary, carry it over to a new leave year.

If that isn’t possible, they must be given compensation for unpaid leave on termination of their employment for leave they have not taken, not just in the current year but also for previous leave years.

Frustration and notice provisions

In situations of catastrophic injury or illness, however, these provisions may not apply as the contract may be “frustrated”.

As a result, the contract and all rights and obligations of the parties terminate automatically without a dismissal. In these circumstances, trade union reps should try to negotiate with the employer to recover payments in respect of notice and accrued holiday pay as a minimum.