Awan v ICTS UK Ltd

(1) The appeal is allowed in part. On proper construction the contract and incorporated booklet gave the claimant a meaningful entitlement to disability income of two-thirds salary while employed once the 26-week condition was met. The contract therefore contained an inherent tension between that entitlement and the employer's general right to terminate on notice. (2) A term can be implied, by reference to business efficacy or the officious bystander test, that once the employee has become entitled to payment of disability income under the long-term disability plan the employer will not dismiss him for continued incapacity to work. That implied term is capable of clear expression and reasonable in the circumstances and operates to limit, not contradict, the express termination right (see paras [51]–[56]). (3) The existence of insurance funding does not negate the implication of the term where the contract itself gives an employer-paid entitlement. The employer could have protected itself contractually but did not (see paras [34]–[39], [54]). (4) Dismissal in breach of contract is not automatically unfair. However the contractual restriction is highly relevant to the assessment of reasonableness and proportionality under unfair dismissal and s.15 Equality Act 2010 (see paras [56]–[57]). The employment tribunal's conclusions that dismissal was fair and proportionate are set aside for reassessment in light of the implied term. (5) The tribunal's finding that the respondent would have dismissed in any event, had it appreciated its contractual obligation, was unsupported by evidence and is set aside; the respondent bore the evidential burden on that counterfactual (see paras [58]–[61]). (6) The tribunal was entitled to find operational difficulties arising from prolonged absence; that factual finding was not perverse (see paras [62]–[64]). (7) Orders: the finding of an implied term is substituted. The questions of fairness, justification under s.15 and whether dismissal would have occurred in any event are remitted for rehearing by a fresh tribunal (see paras [65]–[67]).