Medical Capability Dismissal: Managing Long-Term Sickness

Dismissing employees for long-term illness requires careful handling. Done wrong, you face unfair dismissal and disability discrimination claims.

Legal Framework

Capability as Fair Reason

Capability is a potentially fair reason for dismissal under ERA 1996.

Includes:

• Skill
• Aptitude
• Health
• Any other physical or mental quality

Equality Act Considerations

Many long-term sick employees may be disabled:

• Must not discriminate because of disability
• Duty to make reasonable adjustments
• Must consider alternatives to dismissal

The Balance

Need to balance:

• Employee's right to fair treatment
• Business need for employee to do their job
• Avoiding discrimination
• Operating requirements

When Dismissal May Be Fair

Key Factors

Tribunal will consider:

• Nature of illness
• Likely duration of absence
• Need for employee in that role
• Effect on other employees
• Size and resources of employer
• Medical evidence obtained
• Consultation with employee
• Alternatives considered

No Fixed Timeline

There's no minimum period before dismissal is fair.

Depends on:

• Business impact
• Employee's length of service
• Nature of their role
• Prospects of recovery
• What's reasonable in circumstances

The Fair Process

Step 1: Welfare Contact

Maintain appropriate contact:

• Regular but not intrusive
• Show genuine concern
• Ask about needs
• Don't pressure about return

Step 2: Obtain Medical Evidence

Get occupational health or GP report:

• Nature of condition
• Prognosis and likely duration
• Likelihood of recovery
• Timescales
• Possible adjustments
• Fitness for current role/alternatives

Step 3: Consider the Report

Assess:

• Is return likely?
• When might return happen?
• What adjustments might help?
• Are there alternative roles?

Step 4: Meet with Employee

Formal meeting to discuss:

• Medical position
• Employee's views
• Possible adjustments
• Alternative roles
• Way forward

Allow companion (union rep or colleague).

Step 5: Consider Adjustments

Before dismissing, consider:

• Reasonable adjustments to role
• Phased return
• Alternative roles
• Extended absence

Step 6: Final Decision

If no reasonable prospect of return:

• Dismissal may be fair
• Give notice (or PILON)
• Confirm in writing
• Right of appeal

Step 7: Appeal

If employee appeals:

• Different decision-maker if possible
• Genuinely consider points raised
• May reconsider with new information

Medical Evidence

Consent

Need employee consent for:

• Occupational health referral
• GP report request
• Access to Medical Reports Act 1988 applies

What to Ask

Ask occupational health:

• What is the medical condition?
• How does it affect ability to work?
• What is the prognosis?
• When might they return?
• What adjustments might help?
• Can they do their job/alternative job?

If Employee Refuses

If they won't consent to medical evidence:

• Explain consequences (decision without medical input)
• Make decision on available information
• Document that consent was refused
• Proceed fairly on what you know

Obtaining GP Reports

Under Access to Medical Reports Act:

• Need employee consent
• Employee can see report first
• Can request amendments
• Can withhold consent

Reasonable Adjustments

The Duty

If employee is disabled (or possibly disabled):

• Duty to make reasonable adjustments
• Applies to policies, practices, physical features
• To remove substantial disadvantage

What's Reasonable?

Consider:

• Effectiveness of adjustment
• Practicability
• Financial and other costs
• Size and resources of employer
• Availability of financial support (Access to Work)

Examples of Adjustments

Adjustment	When Appropriate
Phased return	Recovery from most conditions
Reduced hours	Fatigue-related conditions
Modified duties	Physical limitations
Home working	Mobility issues, fatigue
Different location	Commuting difficulties
Specialist equipment	Physical impairments
Extra breaks	Various conditions
Redeployment	Can't do current role
Time off for treatment	Ongoing medical care

Adjustments to Absence Management

May need to:

• Discount disability-related absence from triggers
• Extend review periods
• Apply policy more flexibly

Alternative Employment

Duty to Consider

Must genuinely explore alternatives:

• Suitable vacancies
• Same grade if possible
• Lower grade if necessary
• With employee's agreement

What's Suitable?

Consider:

• Employee's skills and experience
• Medical limitations
• Pay and conditions
• Location
• Their preferences

If Employee Refuses

If suitable alternative offered and refused:

• May affect fairness of dismissal
• Document offer and refusal
• Consider reasons for refusal

Disability Discrimination Risks

Who Is Disabled?

Equality Act definition:

• Physical or mental impairment
• Substantial adverse effect
• On normal day-to-day activities
• Long-term (12 months or likely to be)

Common Qualifying Conditions

Often qualify:

• Cancer, HIV, MS (automatically)
• Mental health conditions
• Chronic fatigue
• Many long-term conditions

Assume they may be disabled for safety.

Types of Discrimination

Direct: Treating less favourably because of disability.

Discrimination arising from disability: Unfavourable treatment because of something arising from disability (e.g., absence).

Failure to make reasonable adjustments.

Defence to "Arising From" Discrimination

Must show:

• Treatment was proportionate means
• Of achieving legitimate aim
• And made reasonable adjustments

Common Scenarios

Scenario 1: Mental Health

Employee has been off 6 months with depression.

Process:

• OH report on prognosis
• Consider support available
• Discuss return options
• Consider adjustments (phased return, reduced hours)
• Only dismiss if no reasonable prospect

Scenario 2: Back Injury

Employee has chronic back pain preventing physical role.

Process:

• OH report on capabilities
• Consider modified duties
• Consider redeployment
• Consider equipment adjustments
• May need to dismiss if can't accommodate

Scenario 3: Recurring Illness

Employee repeatedly off with same condition.

Process:

• Understand the condition
• Is it a disability?
• Can adjustments reduce recurrence?
• Is level of absence sustainable?
• More flexible approach may be needed

Scenario 4: Terminal Illness

Employee has terminal diagnosis.

Approach:

• Sensitive handling essential
• Employee's wishes paramount
• May want to continue working
• Consider death in service benefits
• Rarely appropriate to dismiss

Documentation

What to Record

• All welfare contacts
• Medical reports and consent
• Meeting notes
• Adjustments considered
• Alternatives explored
• Decision reasoning

Why Documentation Matters

If challenged:

• Shows fair process followed
• Demonstrates genuine consideration
• Proves adjustments considered
• Supports decision

Pay and Benefits During Absence

Sick Pay

• Statutory sick pay (if eligible)
• Contractual sick pay (per policy)
• Check policy for when it ends

Benefits

Consider:

• Pension contributions
• Health insurance
• Death in service
• Other benefits

PHI/Income Protection

If permanent health insurance:

• Check policy terms
• May affect dismissal timing
• May need to maintain employment

Checklist

Before Dismissal

• Regular welfare contact maintained
• Medical evidence obtained (with consent)
• Prognosis understood
• Reasonable adjustments considered
• Alternative roles explored
• Formal meeting held
• Employee's views considered
• Decision genuinely open

The Decision

• Based on evidence
• No reasonable prospect of return
• All alternatives exhausted
• Adjustments made or explained why not
• Proportionate to circumstances
• Documented fully

After Dismissal

• Written confirmation
• Right of appeal explained
• Notice given (or PILON)
• Appeal heard fairly
• Final decision confirmed