Court of Appeal gives guidance on long-term sickness absence dismissals

Dismissal of an employee on long-term sick leave can be a potentially fair reason for dismissal. A key factor in establishing the fairness of the dismissal is whether the employer can be expected to wait indefinitely for the employee’s return. The recent Court of Appeal decision in O’Brien v Bolton St Catherine’s Academy considered the issue of dismissal and long-term absence and gave useful guidance for employers.

Background

Ms O’Brien was Director of Learning Information and Communication Technology and in March 2011 was assaulted by a pupil. Her injuries were not particularly serious and she was only off work a short time. However, she was concerned at the school’s lack of action in dealing with aggressive pupils and felt unsafe in certain parts of the school. She was also unhappy that the school refused to re-instate an earlier policy whereby pupils who assaulted staff were automatically excluded from school.

In December 2011, after other incidents, Ms O ‘Brien went off sick with stress at work and was subsequently diagnosed with anxiety, depression and post-traumatic stress disorder (“PTSD”). In April 2012, the occupational health doctor stated that “considerable work” would be required to resolve Ms O’Brien’s anxieties. In spite of medication and psychological treatment Ms O Brien remained unfit for work and no adjustments were identified that might help her return. There had been some difficulties in getting information about her prognosis and in November 2012, Ms O’Brien said she didn’t want to attend a meeting with the school to discuss her continuing absences as she had nothing more to say. She did however provide some information in writing.

After more than a year off work Ms O’Brien was dismissed for medical incapacity with effect from 31 January 2013. At that time there was nothing to indicate an imminent return to work and indeed, the therapist treating Ms O’Brien for PTSD felt unable to express a view about her ability to return to work until the conclusion of the treatment. Ms O ‘Brien notified her intention to appeal the decision to dismiss and said that she would provide up-to-date medical evidence. None was provided until the start of the appeal hearing on 10 April 2013 and it consisted of her GP’s statement dated the day before that she was fit for work and a statement from a psychologist dated 23 February 2013 that recommended further therapy sessions. The appeal panel upheld the decision to dismiss. This was on the basis that, taking into account the medical evidence, there was inconsistent information and nothing to confirm Ms O’Brien had completed her therapy sessions and was fit to work without restriction. Further, the absence was too great a burden on staff and pupils bearing in mind the school’s obligation to provide a consistent programme for its pupils.

Employment Tribunal proceedings

Ms O ‘Brien brought a number of claims including unfair dismissal under section 98 of the Employment Rights Act 1996 (“ERA”), direct disability discrimination and discrimination arising from disability under sections 13 and 15 of the Equality Act 2010. It was agreed by the parties that Ms O’Brien had a disability as defined by that Act.

Regarding the unfair dismissal claim, capability is a potentially fair reason for dismissal under section 98 (ERA) provided that a fair procedure is followed. This means that an employer has to satisfy the “reasonableness” test, that is, in the circumstances, including the employer’s size and administrative resources, the employer acted reasonably in relying on that reason as sufficient to dismiss the employee. This will be determined in accordance with the equity and the substantial merits of the case. Employment Tribunals must not substitute their own view of what is reasonable for that of the employer.

The Employment Tribunal held that Ms O’Brien had been unfairly dismissed. It found that the factors leading to the decision to dismiss were the length of the absences from work, that there was no prognosis indicating that a return to work was likely in the near term and the concerns that the conditions in the school that caused the absences could occur again. The Employment Tribunal held it was not reasonable to dismiss in these circumstances. It would have been reasonable for the school to obtain its own medical evidence to confirm (or not) what Ms O’Brien had said and this would mean only a short delay. Further, the school had not provided satisfactory evidence about any adverse effect on the school and the standard of teaching by waiting a little longer for the appropriate medical evidence and there was no evidence that serious further damage would be caused during that time.

The direct disability discrimination claim was dismissed but Ms O’Brien succeeded in the discrimination arising from disability claim. Her dismissal constituted unfavourable treatment because of something arising in consequence of her disability namely her long-term sickness absence. The school had to show that its treatment was a proportionate means of achieving a legitimate aim. The school’s aims in dismissing Ms O’Brien were the efficient running of the school, the reduction of costs and the need to provide a good standard of teaching. The issue for the Employment Tribunal to consider was that of “proportionality”.

Carrying out a balancing exercise and weighing up the discriminatory effect of the treatment against the reasons for it, the Employment Tribunal concluded that the dismissal was disproportionate. The school had not adduced any satisfactory evidence about the adverse impact of Ms O’Brien’s continuing absence on the running of the school and without this evidence it was reasonable to wait “a little longer” to see if Ms O’Brien would be able to return to work.  The school did not provide a satisfactory explanation about the disruption caused by Ms O Brien’s absence, the nature of the support provided by colleagues, the cost of covering her teaching duties and the effect of the absence on the running of the school and/or the standard of education provided to students. There was no evidence why Ms O’Brien had to be dismissed at the time she was and no evidence how the dismissal rectified the adverse impact of the absences identified by the school.  The Employment Tribunal held that dismissal was the most discriminatory means of achieving the school’s aims. A less discriminatory way of dealing with matters was to wait a little longer to see if, as Ms O’Brien said, she would be able to return to work in the near future.

EAT decision

The school appealed to the EAT on eight grounds. These included the Employment Tribunal’s findings that dismissal was not a proportionate means of achieving a legitimate aim and that the school could be expected to wait a little longer. Further, the Employment Tribunal had mistakenly conflated the “reasonableness” and “proportionality” tests.  The EAT did not accept the Employment Tribunal’s criticism of the school about the lack of detailed evidence regarding the impact of Ms O’Brien’s continuing absence. The absence of the head of an important department with teaching responsibilities (as well as learning and development and administrative roles) having to be covered by colleagues, if covered at all, would have a significant effect on the school especially in times of austerity and shortage of resources. The EAT held that the school’s decision not to wait any longer in order to obtain its own evidence was within the range of reasonable responses and allowed the appeal. The matter was remitted to a differently constituted Employment Tribunal.

Court of Appeal decision

Ms O’Brien appealed to the Court of Appeal. By a majority, the appeal was allowed but the case was described as being “near the borderline” because of the length of the absence and the unsatisfactory evidence about when Ms O’Brien might be fit to return to work.  The crucial point was that, at the time of the internal appeal against dismissal, there was some evidence that Ms O’Brien was fit to return to work. It agreed with the Employment Tribunal that it was disproportionate/unreasonable for the school to disregard that evidence without at least a further assessment by its own occupational health advisers. The case will now proceed to a remedy hearing at the Employment Tribunal.

Some interesting points and practical issues come out of the Court’s judgment:

• There comes a time when an employer is “entitled to some finality” especially when the employee has not been as co-operative as expected and where evidence provided late in the day was not entirely satisfactory. However, whilst at the initial capability hearing there was no evidence that Ms O’Brien was fit to return to work in the foreseeable future the position had changed by the time of the appeal hearing when new, albeit, unsatisfactory evidence was produced. The Employment Tribunal was entitled to conclude that the school should then have obtained its own evidence. Employers should therefore take care when new evidence is produced at a different stage of the capability process, even if it is at the last minute, especially if it indicates the employee is fit or might be fit to return to work or if it recommends that additional medical evidence is required.
• The severity of the impact on the employer because of the employee’s continuing absence on long-term sick leave is a key element in the balancing exercise that determines the point at which dismissal is justified. It is not unreasonable to provide some evidence on this. What kind of evidence will depend on the circumstances. As the Court said, often there is no doubt that the impact is severe and all that is necessary is a general statement confirming this. Other times, the employer will have to give more specific evidence about the difficulties and disruption that the absence is causing. For instance, this could mean that employers need to provide information about the cost of covering the absence if somebody has been recruited for that purpose, the impact on colleagues covering additional duties and the duties that aren’t being covered fully (or at all) because of the absence. This evidence will assist in showing why the decision to dismiss was taken at a particular time and why the decision could not be deferred. Written records of these issues should be kept.
• The legal tests of “reasonableness” under ERA 1996 and “proportionality” under the Equality Act 2010 are different. However, the Court said that it “would be a pity” if there were any real distinction in the context of a long-term sickness dismissal where the employee is disabled and if the dismissal was judged by one standard for unfair dismissal and another standard for discrimination. What this could mean for employers is that if their action is disproportionate, it is unlikely to be reasonable in a long-term sickness/disability case.

Interestingly, in the dissenting judgment, the judge was of the view that Ms O’Brien’s continuing absence was bound to cause the school significant and ongoing detriment and he regarded it as “unreal” to think that specific further detailed evidence was required to show this. In addition, it was odd to criticise the appeal panel for not adjourning the matter a little while longer when Ms O’Brien herself had wanted to proceed. Finally, how much longer was the school expected to wait? Given the unsatisfactory nature of the further evidence produced at the last minute and the length of the absence the decision of the appeal panel was within the range of reasonable responses and was proportionate and objectively justified.

Comment

The O’Brien decision clearly shows the many tricky issues that employers face when managing long-term sickness absence. The fact that this was a majority decision of the Court of Appeal rather than a unanimous one illustrates the difficulty in deciding the point at which it is appropriate to say that enough is enough and the employer cannot be expected to wait any longer. Even so, the decision is very helpful in highlighting the need to ascertain the medical position at all stages of the sickness management process and the need in many cases to show the full impact of the continuing absence on the organisation and its staff.