A Court of Appeal decision has provided helpful guidance on whether an employer can fairly dismiss an employee on long term sick leave where the reason for the sick leave is bullying and mismanagement at work.


The case, Royal Bank of Scotland plc v Suzanne McAdie [2007] EWCA Civ 806, concerned a bank employee who complained about being transferred to another branch.  A meeting was held to discuss her complaint but the employee felt that notes of the meeting did not reflect what was said at the meeting.  This led to a confrontation with the manager who held the meeting, in which the employee found the manager to be “extremely intimidating and bullying”.  She subsequently raised a formal grievance, which was not handled well by the bank.  After many months of absence, the bank invited her to a long-term sickness absence meeting.  It then sought medical advice on her condition and, after over a year of absence, dismissed her on grounds of incapacity due to ill health.


The issue for the Court to decide was whether the bank was precluded from dismissing the employee on grounds of “incapacity” (a potentially fair reason for dismissing an employee) given that its conduct had caused (or at least materially contributed to) her incapacity to work.


After considering the conflicting case law on the point, the Court concluded that the fact that an employer has caused an employee’s incapacity, however culpably, does not preclude it from ever carrying out a fair dismissal of that employee.  It noted that if this was not the case then employers in such cases would be obliged to retain on their books indefinitely employees who were incapable of any useful work.  It also reminded Tribunals that where employees have suffered an injury as a result of a breach of duty by their employers, their remedy is compensation in the ordinary courts, not compensation for unfair dismissal.

The Court held that the key question for Tribunals in considering the fairness of dismissals of employees in such situations is: did the employer act reasonably in all the circumstances?  The circumstances include the fact that the employer was responsible for the absence.  It also held that where the employer is responsible for the employee’s incapacity, it may be necessary to “go the extra mile” in finding alternative employment for the employee or putting up with a longer period of sickness absence than would otherwise be reasonable.


Whilst this decision provides a degree of comfort to employers faced with such situations, it is worth noting that in this case the employee had made it clear to the bank she could not contemplate returning to work and that the medical evidence was that she was unfit for work and that there was no prospect of recovery.  It is open to question whether the bank would have still acted reasonably if there had been a possibility that she could return to work at some point in the future.

Although employers might be able to dismiss fairly, the employee may have a separate claim for personal injury caused by the employer.

Finally, it is important to note that in this case the employee was not receiving any permanent health insurance payments at the time she was dismissed.  Dismissing employees who are receiving, or who may be eligible to receive, such payments is a difficult legal issue on which employers should always take specialist legal advice.

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