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When does an employee’s entitlement to long-term disability benefits cease?

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In ICTS (UK) Limited v. Visram UKEAT/0133/18, the Employment Appeal Tribunal (EAT) considered whether an employee’s entitlement to long-term disability benefits (LTDB) until his “return to work” meant a return to his old job or to any reasonable alternative. It held that it meant the former.

Following a 26-week period of sickness absence on grounds of work-related stress and anxiety, Mr Visram expected to receive LTDB. These were stated to continue until Mr Visram’s “return to work”.

Mr Visram only received LTDB for one year and was then dismissed on grounds of medical capability. He subsequently brought claims in the Employment Tribunal (ET) for unfair dismissal and disability discrimination, which were successful.

Having regard to the wording of the insurance policy (Policy) providing the LTDB, the ET held that “return to work” meant that ICTS was obliged to make LTDB available to Mr Visram until he was well enough to return to the job he had immediately prior to his sickness absence.

ICTS appealed, arguing that Mr Visram’s entitlement would cease when he was able to return to any full-time suitable work. The EAT dismissed ICTS’s appeal.

The EAT found that the words “return to work” clearly meant going back to work for Mr Visram’s employer, ICTS. However, what was not clear was what type of work Mr Visram would have to return to in order to be disentitled to receive the LTDB. The ET was therefore entitled to rely on the Policy wording to interpret an ambiguous provision of the employer’s booklet explaining the LTDB entitlement. Taking both documents together it was clear that “return to work” meant Mr Visram going back to his old job.

Points for employers

The case serves as a useful reminder that employers should thoroughly review the wording of any permanent health insurance policy providing LTDB and, if providing any separate explanation of the benefit to employees, ensure that it is consistent with the policy and is provided for guidance only. Additionally employers need to tread very carefully when considering the dismissal of an employee who is in receipt of LTDB.

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