Dismissal for Incapacity – Key Update
Dismissals for reasons of incapacity are under review in light of recent developments regarding the accrual of annual leave during sick leave. Employers are now weighing up the additional expense of having to pay annual leave for an employee who is on long term sick leave in addition to other financial considerations that may arise. Specifically, since 1 August 2015 employers in the private sector are now obliged by reason of the provisions of section 86 of the Workplace Relations Act 2015 to pay employees for annual leave accrued but untaken while they were on sick leave. The reference period to be taken into account for this calculation is any annual leave accrued but untaken for reasons of sick leave within 15 months of the end of the annual leave year.
In addition to the consideration of additional financial exposure, employment law fora continue to refine and develop the factors to be considered in cases of dismissal for reasons of incapacity.
One such case is the recent Equality Tribunal decision in Bernie Clavin –v- Marks and Spencers (Ireland) Ltd (DEC-E2015-055. In this article, Deirdre Crowley and Emer O’Sullivan look at the current Irish position in relation to the dismissal of employees on the grounds of incapacity and offer suggestions as to how employers can approach the matter when faced with an employee on long term sick leave.
In this case, Ms Clavin claimed that she was discriminated against on the grounds of disability in terms of section 6(2) (g) of the Employment Equality Acts 1998-2011 (the “EEA”), leading to her dismissal. In holding that her dismissal had been a discriminatory dismissal, the Equality Officer (“EO”) noted that while M&S went through some of the motions necessary to defend a discriminatory dismissal claim ‘it fell far short of best practice in many ways’. The EO awarded compensation of €40,000 (the approximate equivalent of 18 months’ salary). In coming to this figure the EO took account of the fact that the Ms Clavin was in her 50s when the dismissal occurred and that this was a time of her life where employment opportunities were lessened. She also took account of the fact that M&S lost a similar discriminatory dismissal case in 2013 where the EO ordered that all HR receive training in respect of equality matters and this was not done. Interestingly, in addition to making this award the EO ordered that M&S conduct a review of its policies and procedures to ensure that they are in compliance with the EEA, with particular reference to the disability ground and that a progress report be made to the Irish Human Rights and Equality Commissioner within one year.
In coming to her decision, the Equality Officer made reference to the Labour Court case of A Health Club and a Worker and the onus which is placed on employers in these situations, including that:
- At a minimum an employer should ensure that they are in possession of all material facts concerning the employee’s condition and that the employee is given fair notice that the question of his or her dismissal for incapacity is being considered. The employee must also be given an opportunity to influence the employer’s decision.
- An employer should look firstly at the factual position concerning the employee’s capability including the degree of impairment arising from the disability and its likely duration. This would involve looking at the medical evidence available to the employer either from the employee’s doctors or obtained independently. If it is apparent that the employee is not fully capable, Section 16(3) of the EEA requires the employer to consider what if any special treatment or facilities may be available by which the employee can become fully capable. The section requires that the cost of such special treatment or facilities must also be considered. Finally, such an enquiry could only be regarded as adequate if the employee concerned is allowed a full opportunity to participate at each level and is allowed to present relevant medical evidence and submissions.
In holding against M&S, and in light of the requirements outlined above, the EO made particular reference to the following:
- The enquiries made as to the factual position of Ms Clavin’s prognosis were inadequate;
- The decision to dismiss Ms Clavin was mainly based on one telephone conversation with a nurse six months prior to the dismissal and in the time which passed between this conversation and the original consultant’s brief report and her dismissal, Ms Clavin had changed consultants and had an operation however she was not allowed to provide medical evidence from the consultant who had operated on her;
- In the circumstances of the case, two days’ notice of the meeting in relation to her dismissal was inadequate and no recommendation was made to her to bring medical evidence to this meeting. Ms Clavin clearly stated in the meeting that she was due to attend with her consultant shortly but M&S were not prepared to wait. The EO found that it was ‘profoundly discourteous’ to ignore her request for an extension of time as her consultant had not returned from his Christmas break;
- No real explorations of reasonable accommodation were made by M&S. An appropriate measure in the circumstances would be to allow Ms Clavin to recover from her operation and explore a return to work (based on medical expertise) in a few months subsequent to that meeting. Had Ms Clavin’s job been kept open for her for another six months, it was highly probably that she would have been able to return to work as she had made a good recovery. In addition, as Ms Clavin was not in receipt of any payment from M&S while she was on sick leave, leaving her job open for her return would have been of nominal cost;
- No appeal of the dismissal was allowed which was not in line with fair procedures;
- By encouraging Ms Clavin to resign rather than be dismissed was asking her to waive her rights as constructive discriminatory dismissal is harder to prove than an actual dismissal;
- While insufficient on its own to shift the burden of proof to M&S, the failure to pay Ms Clavin her statutory entitlement is indicative of the ‘callous approach the respondent took to the complainant’.
It is clear that an employer may not be required to hold a position open indefinitely, however each case must be decided on its specific facts. In any case, the employee is entitled to fair procedures. In practical terms this will normally require a three stage enquiry – firstly consider the factual position concerning the employee’s capability to include an assessment of the degree of impairment arising from the illness, whether the illness is considered to be a disability at law and the likely duration of the illness. Secondly, consider all medical evidence available to include the employee’s medical evidence and evidence obtained independently. If the employee is not fully capable, Section 16(3) of the EEA requires the employer to consider what (if any) special treatment or facilities may be available by which the employee can become fully capable. The section requires that the cost of such special treatment or facilities must also be considered. Here, what constitutes normal cost will depend on the size of the organisation and its financial resources. Thirdly, enquiries in relation to an employee’s medical capacity could only be regarded as adequate if the employee concerned is allowed a full opportunity to participate at each level and is provided with an opportunity to present relevant medical evidence and submissions.
Consideration also needs to be given of the conduct required of an employer prior to dismissing an employee for reasons of incapacity as set out in section 16 (3) of the EEA. Specifically, an employer must show genuine engagement with the process of finding effective and practical measures to allow an employee to return to work.
This article is a general summary on the subject and is not intended to be a thorough review or a statement of the law. Specific legal advice should be sought on a case by case basis.