The Waterfront Partnership

To Be Fair or Unfair

 "To Be Fair or Unfair - Dismissal on Ill-Health"

As painful as it is to acknowledge, many of us spend more hours at work than we do at home or engaging in social activities. Maintaining good relations with our employer is therefore imperative in establishing an effective work-life balance. However, when relations with your employer become so strained that it results in long-term sickness absence, can your employer dismiss you on the grounds of ill-health capability, despite the fact their conduct has caused your ill-health? The case of McAdie v Royal Bank of Scotland[1] demonstrates a new approach to unfair dismissal in relation to ill-health capability.

The Facts

The case involved Mrs McAdie who had been working for the Royal Bank of Scotland for over 20 years. On her return from Maternity leave, she was selected to be transferred to another branch. She informed her manager that this transfer would make childcare arrangements more difficult as they were based around her current location and felt this would lead to added stress which could have a detrimental affect on her health[2]. Despite voicing her concerns to her Manager, Mrs McAdie went to work at the proposed branch. It was during this time that she was absent from work due to work-related stress which was later confirmed by medical reports. As she felt her concerns were not dealt with appropriately in accordance with the bank's company procedure, she therefore submitted a grievance against the transfer and the conduct of her manager.

The grievance was dealt with by the regional director who did not uphold Mrs McAdie's claim, but it was made clear that the bank were eager for her to return to work and offered her the option of working at her chosen location or in a different role. However Mrs McAdie was not prepared to accept this resolution as she claimed it was impossible for her to work and compensation would be the only favourable solution. Roughly 6 months later, the bank decided to put in force its long term sickness procedure and gave Mrs McAdie 12 weeks notice to terminate her employment on the grounds of ill-health[3].

The Appeal

Mrs McAdie lodged a claim for unfair dismissal at the Employment Tribunal (ET). The (ET) held that "no reasonable employer would have dismissed an employee in these circumstances as the employer should have not found themselves in these circumstances". The ET also stated that if the employer had investigated Mrs McAdie's claims adequately and thoroughly from an earlier stage, they would have been in a better position to consider dismissing Mrs McAdie.

The bank appealed this decision to the Employment Appeals Tribunal (EAT) on the grounds that the ET had erred in law by asking the wrong question in relation to the employer's conduct. The bank argued that the ET should have asked "Having contributed to the illness, what would a reasonable employer do in these circumstances, particularly given the evidence that Mrs McAdie was not going back to work in any circumstances?". The bank also argued that an employee could never fairly be dismissed if it was the employer who caused the condition for which the employee was dismissed.

The Decision

The EAT considered three case before it reached it's conclusion. The cases were London Fire and Civil Defence Authority v Betty[4], Edwards v Governors of Hanson School[5] and Frewin v Consignia Limited[6]. After analysing these three cases, the EAT concluded that "if an employer has caused the incapacity in question, however culpable, it cannot preclude him for ever from effecting a fair dismissal". If this were the case, employers would have to keep employees indefinitely, who were not capable of doing any constructive work. This analysis resulted in the EAT allowing the bank's appeal and concluding that the ET had not erred in principle in taking into account the fact that the Bank was responsible for Mrs McAdie's ill-health, but the question it should have asked was "was it reasonable for the Bank to dismiss Mrs McAdie in the circumstances as they then were, including the fact that their mishandling of the situation had led to her illness?". Mrs McAdie appealed the EAT's decision

The Court of Appeal dismissed Mrs McAdie's appeal concluding that the EAT was correct in allowing the appeal as Mrs McAdie and the medical report had made it clear that there was no prospect of recovery even if the Bank had been able to offer some solution and therefore there was no alternative but to dismiss Mrs McAdie on the grounds of ill-health.

Conclusion

It is very unfortunate that Mrs McAdie's ill-health was the result of stress arising from the way the Bank handled her grievance. However, it seems that the courts are unwilling to uphold a claim of unfair dismissal if in the circumstances; the employer has no other way to resolve the employee's grievance. It seems unduly harsh to take this approach but as mentioned earlier, it would also be unjust that an employer has to retain someone that cannot perform any of the tasks they have been employed to do.

Mulika Sannie
Waterfront Solicitors LLP 

©Waterfront Solicitors LLP 2007

  

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[1] [2007] EWCA Civ 806

[2] As she was previously diagnosed with Breast Cancer, Mrs McAdie had previously informed her employer that she wanted to work in a role that had minimum stress as she felt this might contribute to the Breast Cancer returning.

[3] To dismiss an employee under capability is potentially a fair reason under Section 98(2) of Employment Rights Act 1996. Section 98(4) states that to assess whether a dismissal is fair, a two stage approach needs to be adopted.

[4] [1994] IRLR 384

[5] [2001] IRLR 132

[6] (unreported EAT / 0981 / 02)