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Dismissal during entitlement to long-term disability benefits

A recent appeal has overturned an employment tribunal decision to support the dismissal of an employee for incapacity at a time when he was entitled to long-term disability benefits.

The case of Awan v ICTS in the EAT considered a tribunal ruling that had found in favour of an employer who dismissed disabled employee Mr Awan on the ground of capability during a period when he was entitled to long-term disability payments.


Mr Awan had been employed by American Airlines as a security agent at Heathrow Airport and was entitled to a long term disability benefit plan as part of his contract. The benefit would terminate if he was no longer employed. Mr Awan was on sick leave for depression when his employer outsourced its security to ICTS in 2012. The company’s obligations under the benefits plan transferred to ICTS under TUPE.  Mr Awan was still unfit for work two years later and was found to be permanently incapable of carrying out his role. No adjustments could be agreed to facilitate his return to work and he was receiving payments under the long-term disability benefits plan. His employment was terminated in November 2014.

The unfair dismissal claim hinged on Mr Awan’s claim that ICTS UK Ltd’s should not have dismissed him while he was entitled to long-term disability benefits and that to do so amounted to disability discrimination under the Equality Act 2010. Both parties agreed that Mr Awan was disabled and both agreed that he had been dismissed for reasons relating to capability and that the dismissal arose from his disability. The tribunal found in favour of ICTS, rejecting Mr Awan’s claim.

The appeal decision

The EAT did not agree with the original tribunal decision and their argument centres around the employment contract. There was, in effect, a conflict between the purpose of the long-term disability benefits plan and the employment contract, as termination of employment would bring an end to the benefits that were payable as a result of the claimant’s inability to work. The appeal hearing found that the tribunal had been wrong to overlook the fact that the contract should have included a term to prevent the employer from dismissing an employee due to incapacity to work once the employee had become entitled to receive payments under the benefits plan.

Learning points for employers

If a dismissal is in breach of contract it is not always ruled unfair. In this case, however, the impact of the dismissal on the benefits payments made the contractual position relevant to the claim of unfair dismissal.