Wrongly calculated holiday pay
Emma Edis | 10.10.2019
27.06.2019 Emma Edis
ICTS Limited v Visram.
Eligible employees of ICTS are entitled to permanent health insurance (PHI), a benefit that begins 26 weeks from the start of sickness absence. Importantly the policy wording stated that an employee would be eligible for these benefits until the “earlier date of your return to work, death or
Following going on sick leave with work related stress and depression, Mr Visram was dismissed by his employer, ICTS, on the grounds of incapacity as he couldn’t return to the same work he had been doing previously. Mr Visram subsequently brought a claim for unfair dismissal and disability
discrimination and was successful.
When assessing remedy, the Employment Tribunal held that “return to work” meant going back to the work from which he had gone sick. Yet because Mr Visram had been dismissed, he couldn’t go back to what he was doing. Therefore, he was entitled to compensation for loss of disability benefits. Notably, this compensation should reflect the loss of benefits until death or retirement, as per the wording in the ICTS’s health insurance policy.
An employer’s contractual obligation to provide an employee with longterm disability benefits until they “return to work” does not end just because the employee is capable of taking up some form of other paid employment.
This case highlights the importance of effective contractual terms and knowing its commercial implications. In particular, the words used when classifying and determining which benefits employees are entitled to must be given thorough consideration.
Employers should therefore carefully consider the wording of their PHI policies before going ahead with a dismissal and make sure they know of any on-going benefits post-termination.
If you would like advice on preparing tailored terms of employment, don’t hesitate to get in touch.