Skip to content

Managing Long-Term Sickness Absence – Difficult Areas, Recent Cases and Top Tips



Handling long-term sickness absence can be tricky for employers. This article draws out some of the key points from five cases on the subject.

1. Can employers rely on medical reports?

Gallop v Newport City Council (2013)

Key take-away points: When seeking a medical opinion as to whether an employee on long-term sickness absence is disabled, employers should be careful of standard form letters and should make sure that they ask specific practical questions, directed to the particular circumstances of the employee’s putative disability.

Facts: Mr G was employed by Newport City Council.  In 2005 he took sickness leave and was referred to Occupational Health (OH) on a number of occasions over the course of the next few years. OH said that Mr G had “stress-related illness” but that he "was not covered by the Disability Discrimination Act 1995 Act". The Court of Appeal (COA) was asked to rule on whether the employer was entitled to rely on this advice. The COA held that the employer was not able to rely on the OH report.

Conclusion: On the face of it this would seem worrying for employers who are after all not medical experts. However, there are three reasons why this judgment might not be as worrying as it appears: (1) as long as you ask whether the employee's condition is (a) an impairment (b) which has a substantial effect on (c) his day to day activities, then you can probably take the answers at face value, unless you have a clear reason to doubt them; (2) the OH report in this case made no reference to these elements at all; it merely stated that the employee was not "covered by the Act" and the Court therefore held the OH report to be worthless in determining whether the employee was disabled. Furthermore, the employer in this case was aware of facts which made it clear that there was at least a high risk that Mr G was legally disabled; (3) courts are unlikely to expect employers to second guess the medical advice but to decide whether the legal test of disability is satisfied.

2. Long-term sickness absence and reasonable adjustments

Croft Vets v Butcher (2013)

Key take-away point: The duty to make reasonable adjustments for disabled employees may include the provision of private medical treatment.

Facts: Mrs B went on sick leave after her work responsibilities increased and she was subsequently diagnosed with depression. Mrs B was referred by her employer (CV) to a private psychiatrist who suggested that work was a major contributor to her depression and recommended that CV pay for private Cognitive Behavioural Therapy and further psychiatric sessions, although there was no guarantee this would work. CV did not follow the psychiatrist's recommendation. Mrs B resigned and brought a case of disability discrimination. 

Finding: The tribunal found that CV had failed to make reasonable adjustments by failing to fund private psychiatric services and counselling for Mrs B.

Conclusion: Although this judgment may on the face of it seem worrying, the EAT made it clear that employers will not in every case be required to fund private medical treatment and the following caveats should be borne in mind:  (1) reasonable adjustments must be ‘job-related’ for the employer's duty to be triggered, the proposed adjustment in these specific circumstances may have enabled Mrs B to return to work and the duty therefore arose; (2) the fact that Mrs B’s disability had been caused by CV was particularly relevant. (3) the fact that CV failed to update Mrs B as to the efforts being made to resolve her complaints was criticized by the EAT, highlighting the importance of keeping the lines of communication open with employees on long-term sick leave. 

3. Long-term absence and TUPE transfers

BT Managed Services Ltd v Edwards and another (2015)

Key take-away point: Where you are dealing with a TUPE transfer do not assume that an employee on long-term sickness absence will automatically be assigned to the organised grouping being transferred. Each case will depend on its facts but an assignment will be more likely where the employee's inability to carry out work is temporary rather than permanent and where there is an expectation that, at some point in the future, the employee will return to work. 

Facts: Mr E worked for Orange in its domestic network outsource division (DNOD). He was on sickness leave from 2008. In 2009 DNOD was transferred under TUPE to BTMS. In 2010 BTMS decided to keep Mr E permanently absent so that he could continue to receive health insurance payments. In 2013 DNOD transferred under TUPE to Ericsson. BTMS maintained that Mr E's employment transferred to Ericsson on the basis that he remained part of DNOD. Ericsson rejected this argument on the grounds that his absence prevented him from being assigned to the division. 

Finding: The ET and the EAT found that Mr E had ceased to be assigned to DNOD in 2010 when BTMS took the decision to keep him permanently absent. After that time, there was no suggestion that he was fit or could return to work and his link with that grouping was therefore historic and for the administrative purpose of receiving health insurance only.

4. Long-term sickness and annual leave

Plumb v Duncan Print Group Ltd (EAT) (2015)

Key take-away point: be careful when calculating the annual leave entitlement of an employee on long-term sick leave and consider the finding below.

Facts: Mr P was absent on sick leave from 2010 until 2014 when his employment terminated. From 2010 to 2013 he did not take any holiday. Upon the termination of his employment Mr P argued that he was entitled to payment in lieu of the holiday that had not been taken in these years.

Finding: The EAT concluded (a) that a worker on long-term sick leave could carry forward untaken annual leave for up to 18 months from the end of the leave year in which the leave arises (Mr P was therefore entitled to compensation for the leave year ending on 31 January 2013 but was not entitled to compensation for the earlier years); and (b) that there is no rule that an employee must be physically unable to take statutory annual leave during sick leave for that annual leave to be carried forward.

5. Sickness leave and bonuses

Land Registry v Houghton & Others (2014)

Key take-away point: ensure that your bonus scheme does not discriminate against disabled employees.

Facts: In this case, the claimants had each received a formal warning as a result of sickness absences which had resulted from disability. Under the company's policy this warning automatically excluded the claimants from entitlement to an annual bonus. This was inconsistent with the company's policy regarding conduct-related warnings whereby managers had discretion to determine whether such warnings would affect bonus entitlement. 

Finding: The ET upheld claims for discrimination arising from disability and found the employer had failed to show justification for the unfavourable treatment.

Although these cases offer some useful pointers, inevitably they only answer a small number of the questions that long-term sickness absence raises for employers. If you have any questions about dealing with long-term sickness absence in your charity, please get in touch with your usual contact at Farrer & Co or email the author at [email protected].

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, February 2016

Want to know more?

Contact us

About the authors

Farrer & Co logo

Farrer & Co

Farrer & Co, Insights

For enquiries email us on [email protected].

Back to top