Employee entitled to PHI benefits until he could return to the same job


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The Employment Appeal Tribunal (EAT) has held in ICTS (UK) Ltd v Visram that an employee should be compensated for loss of entitlement to benefits under a PHI policy when he was unable to return to the work he had been doing when he went on sick leave.  

The claimant started work at Heathrow Airport with American Airlines (AA) in May 1992. His contract included a long-term disability benefits plan which provided that benefits would commence 26 weeks after the start of the employee's absence and continue until the earlier date of the employee's return to work, death or retirement. In October 2012 the claimant went on sick leave and two months later his employment transferred from AA to ICTS (UK) Ltd. Once he had been absent for 26 weeks he expected to receive benefits in accordance with the plan, and when that didn't happen he presented a grievance. ICTS and the insurer entered into negotiations, following which the insurer agreed to pay the benefits for a year. At the end of the year the claimant was dismissed on grounds of capability. He brought successful claims for unfair dismissal and disability discrimination.

The tribunal held that the claimant was contractually entitled to benefits under the plan until he returned to his original job, died or retired. The EAT agreed, dismissing ICTS's argument that the claimant's entitlement ceased when he was able to return to any full-time suitable work.

Take note: The decision in Visram serves as a reminder to employers that if an employee is entitled to payment of a disability income under a long-term disability plan, a term will be implied into their contract of employment to the effect that the employer will not dismiss them on the grounds of their continuing incapacity to work. This income will be paid unless the employee can return to the job in which they have been employed, and not to any other suitable work.

This article is taken from HR Law - May 2019.

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