Employee on long term sick leave

The Court of Appeal has heard an interesting case regarding the entitlement of an employee on long-term sick leave to income protection payments. The employee started work for the employer in 2003 and went on sick leave in 2009 and, indeed, remains on sick leave. Various benefits were outlined to the employee in communications when his employment started including income protection payments which would increase by 5% each year following the first year of payments. 

His original employer was transferred to another company and his contract of employment was transferred to the new employer in 2015. In the same year, the employer took out a new insurance policy which did not include the original 5% escalator clause. The employee checked the payments that he had received carefully and found that the 5% escalator had not been applied to all relevant payments. As a result, he made a claim for unlawful deduction of wages in the Employment Tribunal in 2018, which claim was successful. There had been an unlawful deduction from his wages arising from the employer's failure to increase the payments to him under the income protection scheme by 5% every year after the first 52 weeks. An appeal to the Employment Appeal Tribunal failed which is why the matter came before the Court of Appeal.

Interestingly, the court found in the employee's favour. The original offer of employment and benefits summary had been incorporated into the employee's contract of employment and thus amounted to a contractual entitlement.

Of particular importance in the case is the fact that any change in the express terms set out in the original contractual document should have been expressly and unambiguously brought to the employee's attention to be effective. This was not done in this case.

The case is a salutary reminder for both employers and employees to carefully consider the sometimes lengthy documents which are sent to employees at the beginning of their contract of employment. It must be remembered that these documents were originally sent in 2003. Employees should ensure that they read and retain all such documents. Employers should ensure that if any employee benefits are going to be altered or reduced due to a change in insurance provider, they are clearly brought to the attention of those employees who are individually affected.

To discuss this or any other employment matter, contact us.