Employment Law Speed Read – 10/12/18

Facts

Mr Awan commenced his employment with American Airlines in November 1992 as a Security Agent, and was promoted to the role of International Security Coordinator in 2005. Mr Awan’s contract of employment entitled him to a long-term disability benefit plan. The terms of the plan specified that the benefits would terminate if the employee was no longer in employment.

On 14 October 2012, Mr Awan was certified as unfit to work. In the following December, American Airlines outsourced its security department to ICTS UK Limited (ICTS) and Mr Awan’s employment rights transferred as a result. Mr Awan continued to receive payments under the benefit plan until he was dismissed for incapability on 28 November 2014.

Following his dismissal, Mr Awan brought proceedings in the Employment Tribunal (ET) for unfair dismissal and discrimination arising from his disability. Mr Awan contended that there was an implied term in his contract of employment that stated he would not be dismissed in a way that would deprive him of his long-term disability benefit plan.

Employment Tribunal

The ET held that there was not an implied term in Mr Awan’s contract of employment which prevented ICTS from dismissing Mr Awan on grounds of incapability whilst he was in receipt of the disability benefits. The ET held that the terms of Mr Awan’s contract were neither inconsistent or contradictory and if the parties had intended something different, this would have been expressed in the contract.

Further, the ET held that ICTS had acted reasonably in dismissing Mr Awan and as such, his dismissal was fair. Mr Awan’s disability discrimination claim also failed. The ET held that Mr Awan’s dismissal was a proportionate means of achieving a legitimate aim and therefore, Mr Awan had not been subjected to unlawful disability discrimination under the Equality Act 2010. Mr Awan appealed to the EAT.

Employment Appeal Tribunal

The EAT found in favour of Mr Awan and allowed his appeal. The EAT implied a term into Mr Awan’s contract of employment that stated “once the employee has become entitled to payment of disability income due under the long-term disability plan, the employer will not dismiss him on the grounds of his continuing incapacity to work”.

The EAT held that the purpose of the long-term disability benefit plan would be defeated if an employer could terminate an employee’s entitlement by dismissing them. The EAT stated that if an employer wants to retain the right to dismiss employees who are in receipt of long-term disability benefits, this right should be expressed in their contract using “particularly clear words”. However, it was noted that even if the express right to dismiss was reserved within the contract, it still may not succeed. The issues regarding the fairness of the dismissal and the discrimination claim was remitted to a new tribunal for reconsideration.

Comment

This case emphasises that employers should be particularly careful when considering dismissing an employee who is absent due to ill health and is in receipt of long-term disability benefits. However, it is noted that the EAT cautioned that contractual terms should not be implied too readily in this area of law.

If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.