Monday, September 18th, 2017
Sometimes, when all other avenues have been exhausted, employers are left with the decision of whether to dismiss an employee who has been on long-term sick leave. This can only be done after the employee has exhausted their entitlement to sick pay and is demonstrating no sign that they will ever be fit enough to return to work.
An employer is perfectly within their rights to do this, provided that they follow the correct procedure (and there is no issue of discrimination), but one issue that often puzzles employers is an employee’s entitlement to notice.
Many employers consider that, if an employee has exhausted their entitlement to sick pay, they have no entitlement to be paid for their notice period if they are dismissed on the grounds of ill health. Unfortunately, this is incorrect.
Every employee has an entitlement to receive statutory minimum notice (one week for each completed year of service). If the employee has an enhanced notice period under their contract of employment, to provide both parties with some security, this can increase the notice due. Whilst enhanced notice periods can be more than an employee’s statutory minimum entitlement, they can never be less.
Often, when an employee has worked for an organisation for a period of time, their contractual notice period will be superseded by the statutory notice period. For example, when a contractual notice entitlement of four weeks is superseded if the employee has eight years’ continuous service, they are entitled to eight weeks’ notice instead of four.
The Employment Rights Act 1996 states that employees on sick leave should be paid in full if they are only entitled to receive statutory minimum notice when dismissed, but not if their contractual notice period (if they have one) exceeds their statutory entitlement by at least one week.
This means that where an employee’s contractual notice period exceeds their statutory entitlement, there is no obligation for the employer to pay notice at the employee’s usual rate of pay, which could result in the employee receiving no pay at all during the notice period if they have already exhausted their right to statutory sick pay. It is complicated so get some advice before you act.
Many employers can and do fall foul of this rather odd provision which favours those employees without written contracts of employment or enhanced contractual terms. It serves as another reminder to ensure that your contracts of employment are up to date and (more importantly) reviewed before you consider taking any action against an employee on long-term sick leave.
If you have any questions about dismissing employees on long-term sick leave please contact us on firstname.lastname@example.org