Dismissing an employee on long term sick leave

Dear Auntie

At my organisation there is a member of staff (Tim) who has been off work with a bad back for 3 months. My MD wants to dismiss him but, as HR manager, I am worried about doing this. Please could you give me some guidance as to the issues involved and the risks we face by dismissing him.

Thank you.
Worried Wendy




Dear Wendy

You are right to be worried! Dismissing this employee is potentially very risky and if the company gets it wrong, it could face a large award of compensation from an employment tribunal.  The key risks the company faces are a claim of unfair dismissal (since Tim has more than one year’s employment) and, more seriously, a claim of discrimination on the grounds of disability. 

As you know, the unfair dismissal compensatory award is now capped at £65,300 (prior to 1 February 2010 it was £66,200). However, compensation for disability discrimination is uncapped and, assuming Tim could show a significant period of loss (i.e. that it would take him a long time to get another equivalent job), the award of compensation were he to win his claim could be substantial.

Here is some guidance as to managing these risks:

-    obtain Tim’s consent to you contacting his GP in order to find out from the GP what the prognosis is as regards his current condition, when he is likely to recover and what adjustments might be needed to enable him to return to work;

-    consider whether you think Tim might have a disability for the purposes of the Disability Discrimination Act (“DDA”).  In broad terms, he might be disabled if he has a physical impairment which has a substantial adverse effect on his ability to carry out day-to-day activities and this has lasted or is likely to last for at least 12 months.   Whether someone has a disability under the DDA is partly a legal issue but also a medical one and if the matter is not clear, you wish may to seek specialist medical input in order to help you understand this better;

-    if you wish to obtain a medical opinion as to whether Tim is disabled or if you want a more detailed report than you can obtain from Tim’s GP, consider sending him for a detailed examination by a specialist chosen by the company who will provide the company with a detailed medical report. If the matter were to end up in the tribunal, medical evidence is crucial;

-    since Tim is not receiving permanent health insurance benefits at the moment, you don’t need to worry about this yet but you would need to tread very carefully if the company wanted to dismiss him just before he was due to start receiving these benefits – there is a risk of this being a breach of his contract.  Thankfully, he is not currently in receipt of phi benefits – the position would be even more complicated if he was;

-     if Tim is improving and could come back to work with appropriate adjustments, the company should seek medical input as to what these should be and involve Tim in the process to agree what adjustments will be made – these could be providing him with specialist equipment as well as permitting him to work shortened days or on a part-time basis to ease him back to work. It would obviously be dangerous to dismiss him if his return to work could be achieved in the short-term with adjustments which are not too onerous on the company;

-    if there is no prospect of him recovering or if there are no adjustments that can be made to enable him to return, it is possible to dismiss Tim fairly but the company would need to show that he simply could not do his job anymore, that there were no adjustments it could make and that there were no other jobs which he could do.  The company would then need to follow an appropriate dismissal process involving consultation with Tim in order to achieve a fair dismissal.

As you will see, this is a tricky situation with many pitfalls for the employer so you should make sure you proceed with caution at every stage in order to avoid an expensive claim further down the line.