Long-Term Sickness Absence – HMRC Wins Reduced Payout To Former Employee

McAllister v Revenue and Customs Commissioners [2022] EAT 87

Facts

In the case, McAllister v Revenue and Customs Commissioners, Mr McAllister worked from HMRC from May 2011. He suffered from anxiety and depression and had a lot of lengthy periods of sickness absence some of which were not related to his mental health condition.

He was dismissed in December 2018 as HMRC considered that his absences were impacting productivity and staff morale and all reasonable adjustments had been considered.

As Mr McAllister was dismissed on grounds of capability, he was entitled to a payment under the Civil Service Compensation Scheme (CSCS) but this payment was reduced by 50% due to his conduct. He appealed this decision and on review, his payment was increased to 80%.

He then brought Tribunal claims including a claim for discrimination arising from disability in relation to his dismissal and the reduction of his CSCS payment.

At the initial Tribunal, Mr McAllister’s claim for discrimination arising from disability in relation to his dismissal was unsuccessful. The Tribunal found that although he had been dismissed due to something arising in consequence of his disability (i.e. his absence from work), HMRC could objectively justify its decision as a proportionate means of achieving a legitimate aim (ensuring adequate attendance and fairly managing sickness absence).

The Tribunal did uphold his claim in relation to the decision to reduce the CSCS payment to 50% but found that the appeal decision to increase only to 80% was again, objectively justified.

Mr McAllister appealed both findings. HMRC cross-appealed the ET’s decision on the CSCS payment.

Employment Appeal Tribunal (EAT) decision

The EAT dismissed Mr McAllister’s appeal and allowed HMRC’s cross-appeal.

The EAT could find no fault with the Tribunal’s decision on HMRC’s decision to dismiss Mr McAllister. The Tribunal has found that the absence was detrimental to HMRC and then balanced this with the impact of dismissal and the aim of ensuring that staff was capable of satisfactory attendance.

The decision in relation to the CSCS payment, however, was criticised as the Tribunal had made a finding on this despite it not being a claim before it.

In allowing the cross-appeal, the Tribunal considered whether being treated as entitled to a payment under the CSCS was capable of being unfavourable treatment and found that it was not as Mr McAllister would have not received a payment if he was dismissed for a reason not relating to his disability.

Comment

Employers grappling with sickness absence issues can take some comfort from this case given the view of the EAT that requiring satisfactory levels of attendance and considering the impact of absences on colleagues and their morale were legitimate aims that the employer was entitled to consider when dismissing an employee for absence relating to a disability.

Employers will need to show that they have considered all relevant evidence (including medical advice) and followed a proper process before they proceed to dismiss employees on grounds of capability for absence.