Awan v ICTS UK Ltd is a clear reminder of the dangers of dismissing an employee who is in receipt of long-term disability benefits. The crux of this case was whether the contractual terms entitling Mr Awan to long term disability benefit but also entitling the employer to dismiss in cases of long term absence were inherently contradictory.
Mr Awan worked for American Airlines as a security agent. His contract entitled him to both contractual sick pay and the benefit of a long term disability benefit plan. The Airline had an insurance policy with Legal & General for the provision of the long term benefit to its employees. There was no evidence that the terms of the policy were ever made available to employees nor was it referred to in the contract of employment. The policy provided that the insurance would terminate "immediately in the event of the insured member ceasing to be in employment".
In October 2012, Mr Awan was certified as unfit to work because of depression and he remained absent from that date until the termination of his employment in November 2014. On 1 December 2012, Mr Awan's employment transferred under TUPE to ICTS on his existing terms and conditions which included a contractual right to 26 weeks' sick pay. Legal & General initially refused to provide the long term ill health benefit because by the time it was required Mr Awan was no longer employed by American Airlines. However, after some negotiations, the insurer agreed to provide cover until September 2014 as a goodwill gesture. When that period expired ICTS offered to meet the liability for payments in the short term, in the belief, following the TUPE transfer, that Legal & General would be required to continue to meet the obligation in the longer term. However, following some consultation with ICTS, Mr Awan was dismissed. Up until that point ICTS had continued to fund the monthly payments to him.
Mr Awan claimed that the dismissal was both unfair and discriminatory and the employment tribunal dismissed both claims. The tribunal held that the employer had acted reasonably in dismissing Mr Awan by reason of capability and that the dismissal was a proportionate means of achieving a legitimate aim. While ICTS were contractually obliged to continue to pay the benefits while he was employed, there was no implied term preventing the dismissal of Mr Awan for incapacity while he was entitled to receive such benefits. The tribunal held that implying a term restricting the ability of ICTS to dismiss would contradict the unrestricted express term allowing for dismissal.
The tribunal also held that it was a legitimate aim to ensure that employees attended work and did the job they were employed to do and that, in these circumstances, dismissal was a proportionate response. This was on the basis that (1) Mr Awan's continued absence caused ICTS operational difficulties, (2) he had been absent for two years and (3) there was no indication he would be able to return to work even with adjustments.
On appeal the EAT overturned the Tribunal's judgement. The effect of the dismissal clause was that it entirely undermined the clause providing long term disability benefits. The EAT were of the view that this was not the intention of the parties. While courts and tribunals will not readily imply terms into a contract it will be done in some circumstances. In this case, where the dismissal term was inherently contradictory to the term providing for the long term disability benefit it was necessary to imply a term which limited the effect of the dismissal clause.
