Dismissal for "capability" where the employee has been off sick
1. In BS -v.- Dundee City Council  CSIH 91 (12 November 2013) the Inner House of the Court of Session (the Scottish Court of Appeal in civil matters) has given valuable guidance on a number of points in relation to dismissal on "capability" grounds where the employee has been off sick.
2. Readers of this note will be aware of the applicable statutory background. Put at its briefest, under section 98 of the Employment Rights Act 1996 dismissal of an employee by reason of "capability" is, in the jargon of the trade, potentially fair. "Capability" includes health.
3. In this case, the appellant went on sick leave in early September 2008 and remained off sick until late September 2009. Throughout the intervening period of just over a year the appellant's GP had issued sick notes which repeatedly indicated that he would not be ready to return to work for another two months. During the same period, the appellant was examined, at the employers' request, by an occupational health nurse whose reports likewise gave no sign of an imminent return to work. In August 2009 the employers had a meeting with the appellant and told him that if he did not return to work on 14 September consideration would be given to his dismissal. Following another inconclusive review by an occupational health nurse the appellant was seen by an occupational health doctor, who reported that: "I would expect that he would be able to return to work within the next one to three months. I would be happy for him to return to work when his GP issues a final certificate." On 14 September the appellant did not return to work: instead, he was signed off by his GP for another four weeks, though the sick line did not indicate whether it was a final certificate. Towards the end of September the appellant had a meeting with his employers and told them that he was not ready to come back to work and was "no further forward". The employers then dismissed him on the ground of "capability".
4. The employee brought proceedings in the Employment Tribunal, which held that he had been unfairly dismissed and adjourned the case for further submissions on the question of remedy. The employers then appealed to the EAT against the finding of unfair dismissal and when that appeal proved successful the appellant appealed to the Inner House.
5. In a well thought-out and carefully-worded unanimous opinion writtten by Lord Drummond Young, the Inner House considered the leading cases of Spencer -v.- Paragon Wallpapers Ltd  ICR 301 and Daubney -v.- East Lindsey District Council  ICR 556 and identified three important "themes" which emerged from them. "First, in a case where an employee has been absent from work for some time owing to sickness, it is essential to consider the question of whether the employer can be expected to wait longer. Secondly, there is a need to consult the employee and take his views into account. We would emphasize, however, that this is a factor that can operate both for and against dismissal. If the employee states that he is anxious to return to work as soon as he can and hopes that he will be able to do so in the near future, that operates in his favour; if, on the other hand he states that he is no better and does not know when he can return to work, that is a significant factor operating against him. Thirdly, there is a need to take steps to discover the employee's medical condition and his likely prognosis, but this merely requires the obtaining of proper medical advice; it does not require the employer to pursue detailed medical examination; all that the employer requires to do is to ensure that the correct question is asked and answered."
6. As regards the first of the above "themes", the Tribunal had not fully addressed the question whether the employers could have been expected to wait any longer before dismissing the employee: it had not expressly addressed the "balancing exercise" which the employers had to perform when determining whether they could wait any longer. On the second issue, the Tribunal seemed to have given little if any weight to the employee's own views. The views of the occupational health doctor "should have been balanced against the evidence that came from the appellant" (emphasis added). On the third point, the employers' obligation in terms of Daubney is to take "such steps as are sensible according to the circumstances" to determine the employee's medical position. The Tribunal had interpreted this as meaning that the employers should have sought further medical advice but, as the Inner House observed, given the appellant's subjective view that he was not improving it was "difficult to see how further medical advice could have clarified matters." Summing up the position, the Inner House said: "The respondents had a medical opinion, and they had to balance that against the appellant's own view. For that reason we think that the Tribunal attached too much importance to the need to obtain a further medical opinion; that question was rather whether a reasonable employer, in view of [the occupational health doctor's] report, the continuing note from the GP, and the appellant's own views, would have waited longer, or whether the decision to dismiss on 23 September was within the range of reasonable responses open to such an employer. That issue was not squarely faced by the Tribunal." It will be seen that the notion of balancing - i.e., of the employer's having to conduct a balancing exercise - runs through this passage like a Leitmotiv.
7. To this commentator at least, it appears that the decision of the Inner House may contain an implied gloss on Daubney. Whereas in the latter case the EAT had held that "steps should be taken by the employer to discover the true medical position" (emphasis added), in its own formulation of the test the Inner House referred merely to the employer's discovering "the medical position", with - to state the obvious - the word "true" omitted. This may be a signal that, in its practical application, the Daubney test should not be pitched too high. The employer's duty is not to discover that which, as a matter of objective fact, is indeed the "true" medical position. Rather, the question, in the circumstances of any given case, is whether - judged by the standards of a reasonable employer - the employer has done enough to discover the medical position.
8. The Inner House also dealt with the fact that, in deciding to dismiss the appellant, the employers had not taken his length of service into account (by September 2008 the appellant, who was 55 years old, had been with the employers for 35 years). At first instance, the Tribunal had held that this had rendered the decision to dismiss the appellant both procedurally and substantively unfair, the implication being that length of service was always relevant per se. In considering this point, the Inner House drew an important distinction between misconduct cases and sickness cases. "In misconduct cases length of service will often be relevant, because if the employee has worked for a long time without misconduct that may be a strong indication that either he is unlikely to have done anything seriously wrong or what he has done can be treated as a temporary aberration: O'Brien v Boots Pure Drug Co,  IRLR 261; Johnson Matthey Metals Ltd v Harding,  IRLR 248. In cases involving dismissal on the ground of ill-health, the relevance of length of service is not quite so clear cut. In an appropriate case, however, it may show that the employee in question is a good and willing worker with a good attendance record, someone who would do his utmost to get back to work as soon as he could. The critical question in every case is whether the length of the employee's service, and the manner in which he worked during that period, yields inferences that indicate that the employee is likely to return to work as soon as he can. In the present case the Tribunal did not address this question; they merely treated length of service as a factor that in itself was automatically relevant. In our opinion that is not the correct approach." There is nothing new in the Court's restatement of the position in misconduct cases, but this appears to be the first time that a an Appeal Court has specifically and directly addressed the question of the - actual or potential - relevance of length of service to dismissal for health reasons.
9. So the present decision is helpful in a number of respects. In the first place, it reviews the Spencer and Daubney decisions and it contains an implicit warning against approaching the well-known dicta in Spencer and Daubney in a merely formulaic, mechanistic way, without considering what those cases were really saying. Secondly, it also contains an implicit reminder that the Spencer and Daubney tests can, in some circumstances, be intertwined, so that it may be artificial to treat them as if they had nothing to do with each other. Thirdly, it may contain a veiled warning against reading too much into Daubney. And finally, as mentioned in the foregoing paragraph of this note, there is, at last, authoritative guidance as to the relevance of length of service in cases of dismissal for health reasons.
Michael Howlin, Q.C.
The author of this note was counsel for the respondents (i.e. the employers) in the Inner House.