The EAT has recently held in the case of ICTS (UK) Limited v Visram that an employee would have been entitled to benefits under a permanent health insurance (PHI) scheme until death or retirement, had he not been dismissed.
Facts of the case
Mr Visram was entitled to participate in a long-term disability benefits plan, which provides that benefits will commence 26 weeks after the start of the employee’s absence and continue under the ‘earlier date of your return to work, death or retirement’.
Specifically the details of the plan stated:
- An Insured Member will be entitled to benefit under the Policy but only so long as he is a Disabled Member
- A Disabled Member is defined as an insured member who ‘is incapacitated by an illness or injury which prevents him from performing his own occupation’
- ‘his own occupation’ is defined as ‘the essential duties required of the Insured Member in his occupation immediately prior to the commencement of the Deferred Period…’
Mr Visram went on sick leave from his job as International Security Co-ordinator in October 2012, and, two months later in December 2012, his employment transferred to ICTS (UK) Limited under TUPE.
Mr Visram raised a grievance as he had not received the benefits under the plan after he had been absent on sick leave for 26 weeks. The insurer agreed to pay those benefits only for one year until the end of September 2014. After expiry of that period, he was dismissed on the grounds of capability.
Mr Visram brought a claim for unfair dismissal and disability discrimination which were successful.
At the remedy hearing, the employment tribunal accepted that Mr Visram was contractually entitled to benefits under the plan until his return to his original job with ICTS, death or retirement. It rejected ICTS’s argument that his entitlement ceased when he was able to return to any full-time suitable work.
The Employment Appeal Tribunal held that the benefits would continue so long as the Insured Member was a Disabled Member. A Disabled Member is defined as incapacitated from carrying out the duties of the job he was carrying out when he became incapacitated. The employment tribunal was, therefore, entitled to come to its conclusion: Mr Visram was entitled to be paid until death or retirement.
Reminder for employers
This case is an important reminder for employers who are involved in TUPE transfers which involve employees who are entitled to PHI benefits. In addition it is important to review the wording of policies and contracts of employment when offering such benefits.