Health benefits
In Awan v ICTS UK Ltd, the Employment Appeal Tribunal (EAT) held that an implied term of the contract of employment prohibited the employer from dismissing the employee for medical capability while he was entitled to receive long-term disability benefits.
The employer discriminated against an employee by withdrawing his permanent health insurance (PHI) benefits when he reached the age of 55, found the employment tribunal in this age discrimination case.
This week's case of the week, provided by DLA Piper, considers whether or not a non-dismissal term can be implied into a contract of employment where the employee is entitled to permanent health insurance (PHI).
The Employment Appeal Tribunal has held that, on its true construction, a company's long-term disability scheme applied to employees who were permanently incapable of employment in any capacity, rather than merely incapable of working for the company.
In Pioneer Technology (UK) Ltd v Jowitt, the Court of Appeal holds that a contractual clause that, independently of the employer's insurance policy, provided for long-term disability payments to be made to employees no longer able to work due to illness or injury, amounted to a freestanding obligation on the employer to provide such payments to a qualifying employee in circumstances where cover was excluded by the insurance policy.
In Marlow v East Thames Housing Group Ltd, the High Court holds that where an employee is contractually entitled to benefits paid by insurers under a permanent health insurance policy with the employer, the employer is bound to take all reasonable steps to secure those benefits from the insurers. This could, depending on the circumstances, entail pursuing litigation against the insurers.
In Walton v Airtours plc and another, the Court of Appeal holds that an airline pilot who was unable to continue with his job after becoming ill with chronic fatigue syndrome, but was fit to undertake light part-time work with rehabilitation and a programme of support, remained entitled to benefits under the employer's PHI scheme, notwithstanding that those benefits were payable in the long term only if the employee was unable to "follow any occupation".
A restriction in an insurance policy underwriting a contractual permanent health insurance scheme, which disentitled an employee to benefits on leaving service, was not incorporated by reference or implication into his contract of employment, holds the High Court in Villella v MFI Furniture Centres Ltd.
In Adin v Sedco Forex International Resources Ltd [1997] IRLR 280 CS, the Court of Session held that if an employer provides sickness benefits it will be a breach of contract to dismiss an employee on grounds of ill health while he or she has sickness benefit outstanding.
In Rutherford v Radio Rentals Ltd, the Court of Session holds that to give effect to an employer's contractual obligation to provide personal accident insurance for its employees, it may be necessary to imply a further term that the employer must make a payment to any employee who qualifies under the terms of the insurance policy referred to in the contract. The employer cannot discharge its obligations merely by relying on a refusal by the insurance company to honour the policy.
Employment law cases: HR and legal information and guidance relating to health benefits.