Bridgewater Paper Co v Hillyer & Anor

A dismissal is automatically unfair where the employer has decided to dismiss before completing the statutory capability procedure. The tribunal’s finding on that issue will not be disturbed where the appellate court cannot assess the evidence before it.

A long-term disability scheme providing benefits to employees permanently incapable of employment in any capacity ordinarily applies according to its natural meaning. It does not extend merely because an employee cannot work for the particular employer, while remaining capable of working elsewhere. The surrounding circumstances may confirm that construction, especially where the employer was assuming the cost of an insurance scheme and seeking to reduce expenditure.

Two long-serving electricians, both suffering from asthma, were dismissed following capability hearings. The Employment Tribunal majority found that the employer had decided to dismiss before the hearings and that the dismissals were therefore automatically unfair, as well as unfair under ordinary principles. It also construed a revised long-term disability scheme as covering employees unable to work for the employer, although capable of other work.

The employer appealed. The appeal raised the effect of section 98A of the Employment Rights Act, the reasonableness of the dismissals, and the proper construction of the disability scheme.

1. The appeal was dismissed in relation to the finding that the dismissals were automatically unfair, but allowed to the extent that the Employment Tribunal had construed the long-term disability provision in favour of the claimants.

2. The majority finding that the employer had decided to dismiss before the capability interviews was not seriously arguable as perverse on the material available to the Employment Appeal Tribunal. Once that finding stood, the dismissals were automatically unfair because the decision to dismiss pre-dated completion of the statutory procedures under section 98A and section 98A(2).

3. The revised scheme replaced the earlier sickness and long-term disability provisions. Its central eligibility condition was that the employee’s medical condition rendered him permanently incapable of employment in any capacity.

4. On its true construction, those words could not be limited to employment with the respondent. The natural meaning of the clause, and the surrounding circumstances, did not support adding such a limitation. The respondent was under financial pressure and had assumed the cost of long-term disability cover after insurers withdrew it. It would therefore be unusual for it to accept liability for employees able to work elsewhere but unable to work in its particular environment.

5. The claimants could work in office-based employment away from dust and chemical fumes. They therefore did not satisfy the scheme’s requirement of permanent incapacity for employment in any capacity and were not entitled to the long-term disability payments.

• Employment Appeal Tribunal: The majority of the lower tribunal found the dismissals unfair and construed the long-term disability scheme in favour of the claimants. The present Employment Appeal Tribunal dismissed the appeal concerning automatic unfairness but allowed it on construction of the scheme.