The Court of Appeal has recently settled this question, by upholding the approach taken by the EAT in the case of McAdie v Royal Bank of Scotland.

The employee was dismissed on the grounds of ill-health. She had been off work for more than a year suffering from serious depression which had been triggered by the way in which a grievance that she had raised with her employer (about a relocation of her work) had been handled.

When she claimed unfair dismissal, the Employment Tribunal considered that her claim must succeed. It was satisfied that ‘no reasonable employer would have dismissed in these circumstances because no reasonable employer would have found themselves in these circumstances’.

The employer appealed to the EAT. The appeal was successful.

The EAT confirmed that the fact that the incapacity had been caused, in whole or in part, by the employer would always be relevant as to whether, and if so when, it would be reasonable for the employer to dismiss the employee on grounds of incapacity.

However, that fact alone could not prevent the employer from ever effecting a fair dismissal of that employee. Otherwise, employees incapable of any useful work would have to be kept on the books indefinitely. Also, such employees still had the right to claim damages for personal injury, including compensation for loss of earnings, in a separate claim.

The question to be asked was – ‘Was it reasonable for the employer to dismiss the employee on that date, in the circumstances as they then were, including the fact that their mishandling of the situation had led to her illness?’ In this case, the medical evidence was clear that there was no prospect of her returning to work and so the dismissal was fair.

Point to note:

  • While such a dismissal may be fair, employers must take care to act reasonably. In McAdie, the EAT said (and the Court of Appeal agreed) that it may be necessary in such a case for the employer to ‘go the extra mile’ in finding alternative employment for such an employee or put up with a longer period of sickness absence than would otherwise be reasonable before dismissing, if the dismissal is to be judged to be fair.