Employment Law Cases

ICTS (UK) Ltd v Visram

An employee was rightly compensated for loss of entitlement to benefits under a PHI policy when he was unable to ‘return to work’ following sickness absence. The ‘return to work’ was a return to the work he had been doing when he went off sick, not a return to any work.

Background

Mr Visram’s contract entitled him to the benefit of an insurance-based ill-health scheme which would pay two-thirds of his salary during an illness. The relevant policy wording confirmed that payment would ‘continue until the earlier date of your return to work, death or retirement’. Entitlement under the scheme was conditional on Mr Visram remaining employed. Mr Visram went off sick with work-related stress and depression. While he was off sick, the ownership of the business changed hands and his employment TUPE-transferred to ICTS. Mr Visram’s employment was terminated by ICTS on capability grounds, due to his prolonged absence.

His tribunal claims for unfair dismissal and disability discrimination were successful. As to compensation, the tribunal held that ICTS was contractually obliged to continue to provide Mr Visram with the long-term disability benefits up to such time as he became fit enough to return to the position he had held before he went on sick leave and ordered that it be paid monthly until that time or until death or retirement. ICTS appealed to the EAT, arguing that that it was only obliged to continue to provide Mr Visram with the benefits until such time as he became fit enough to return to work in any suitable full-time position. Dismissing the appeal, the EAT held that ‘return to work’ meant return to the work from which Mr Visram had gone sick. There was no prospect that Mr Visram would ever be able to do that and so the tribunal had been correct in deciding that he was entitled to be compensated for loss of benefits until death or retirement. ICTS appealed again.

Court of Appeal decision

The appeal was dismissed.

The reference to 'return to work' in the contractual documentation did not mean a return to any suitable, full paid work that the individual was capable of carrying out. If that had been the intention, it would have been possible to include a provision to that effect. In the context in which it was used, it was clear that a return to work meant a return to the job held before the absence. The fact that another case had interpreted the meaning of 'unable to work' in a different way was irrelevant, given that it was dealing with a different contractual framework.

Link to judgment: https://www.bailii.org/ew/cases/EWCA/Civ/2020/202.html

Comment

This was a costly lesson for this employer and is another example of where the courts have found in an employee’s favour when determining entitlement to contractual benefits, in circumstances where the policy document covering the entitlement was ambiguously drafted. Always ensure that every angle of an employee’s insurances and benefits are considered before taking any action, particularly in relation to a disabled employee who is receiving long-term disability benefits. Remember that in the absence of an express term in the contract, there is an implied term that those in receipt of PHI will not be dismissed if this will affect their right to this benefit.

The decision also highlights:

• that in a TUPE transfer, all of an employee’s rights under their employment contract transfer to the incoming employer - it is critical that if you are the transferee employer, you identify what those rights are, and
• the possible risk that covert surveillance can lead to an award of aggravated damages.