An employer can fairly dismiss for gross misconduct where it has a genuine and reasonable belief (after reasonable investigation) that an employee has dishonestly exaggerated their condition and fraudulently claimed sick leave and pay. The EAT confirmed in Metroline West v Ajaj that such dishonesty is a fundamental breach of trust and confidence and may justify dismissal.
Whether dismissal is fair in any particular case will depend on the facts, including whether the employer has communicated to staff and acted consistently in relation to malingering and whether it has convincing evidence of the deceit. In some cases it may be appropriate to obtain covert evidence of activities in a public place, or review activities reported on publicly available social media. Often it will be prudent to obtain a medical opinion on what this evidence means in terms of the employee's condition.