Monday, 18 October 2010

Employees might be allowed to work elsewhere while on sick leave provided they are not drawing sick pay

The dismissal of an employee, who was working at his own business without his employer consent whilst being on sick leave and receiving sick pay, may be considered according to the circumstances fair. In the case McCann v Clydebank College – 2010 UKEATS/0061/09/BI, the dismissal of the employee was indeed considered fair by both the Employment Tribunal of Glasgow and the EAT of Edinburgh.

The final judgment of the Tribunal was essentially based on two main points:

1)    Depending on the diagnosis, the fact that an employee is considered unfit to carry out a particular job does not necessarily entail that this is unable do to other types of jobs. In this specific case, it was not hence considered per se relevant the fact that the employee was performing a job elsewhere while having reported illness to his employer;


2)    It was considered unacceptable that an employee may perform remunerative work whilst receiving sick pay from his employer.


Two additional interesting points emerged from this decision, to wit:

1)    Whether the employee should have performed unpaid work, the dismissal would have most likely been considered as unfair, as it actually occurred in the case Murphy v Nissan Motor Manufacturing UK Ltd - Employment Tribunal of Newcastle-upon-Tyne, 11 July 2006 Case No. 2511366/04;


2)    Whether the employee would have asked his employer the consent to perform a different work during sick leave and would have accepted an arrangement for sick pay, this would have arguably been allowed to perform remunerative job elsewhere during sick leave and his eventual dismissal would have been as likely as not deemed unfair by the Court.
The first advice emerging from this Court case to employers is thus to clearly state in their absence policies that while on sick leave employees are not allowed to perform any other job, or that this circumstance is admissible only whether previously discussed and agreed with the employer and the necessary sick pay arrangements have been made.

Despite the Court decision is clear and supported by full, careful and detailed reasons, there are a few points which might appear to be controversial. Points which could have indeed further supported the appropriateness of the Court decision; albeit it is clear that to ensure the Appellant all the possible extenuating circumstances, the Tribunal examined the case very carefully.

The first of these points concerns the certificate, issued by the local GP, provided by the Appellant. The certificate, with a general formulation, stated that the patient was unfit to work and not that this was unfit to work at the college or to perform a particular type of task. The tribunal judgment stemmed from the assumption that the circumstance a person is unfit to a particular job does not necessarily imply that this is unfit to perform a different type of job, albeit this is a consideration going beyond the Tribunal responsibility. In the event an employee should hand to his employer a medical certificate and this, certificate notwithstanding, should persuade the employee to work in that his/her type of illness should not prevent him/her to perform a different task, whether the employee should be victim of a sudden and severe health disorder and a consequent injury, the employer would clearly be considered responsible.
The decision and responsibility to deem whether a person, generically considered unfit to work, might be actually deemed fit to do some types of working activities should indeed invariably rest with the GP. The crucial and decisive importance the Court gave to the fact that the Appellant was both doing remunerative work and receiving sick pay, albeit acceptable to some extent, could be considered debatable from the employer point of view to some other degree.

An organization when planning its activity is clearly banking on its entire workforce support; the event an employee is performing a job elsewhere cannot be merely balanced by the fact that the employer is not paying this any sick pay. The prolonged absence of employees is in fact highly likely to cause serious problems to a company in terms of work organization and detriment to its productivity standards.

It would be interesting to pinpoint to what respect the Court considered the financial aspect crucial in its decision-making: because the Appellant performed a paid job while receiving sick pay and thus an extra financial advantage from his illness or to establish the Appellant degree of involvement in and the significance attached by this to the other job? The Tribunal, in one of its comments to the case, considered completely acceptable “a man off with stress tending to his own garden, shopping or carrying out such activities.” This comment would let it transpire that the Tribunal considered the financial aspect taking heed of the unjust enrichment or undue profit derived from the situation to the Appellant.


The facts
The Appellant is an automotive engineer employed by the Respondent on a part-time basis contract as a lecturer in motor engineering. His contract of employment stated that he was obliged to work for the college for 26¼ hours per week, of which a maximum of 18 hours typically by way of “class contact.” Nonetheless, since the contract of employment did not provide for any specific schedule for the class- and non-class-contact, the Tribunal held that the Respondent had the latitude to determine how the Appellant work should have been timetabled. The Court, accepting the Appellant’s submission, acknowledged that this was under the “cycle 1” scheme, according to which his class contact days should have been on Mondays, Tuesdays or Wednesdays.

The Appellant owned a garage where he worked when he was not teaching at the college; this circumstance was indeed widely known by his colleagues. Despite the Appellant contract clearly stated that this had to receive his employer approval for any such outside work, during the appeal the fact that this did not inform the employer of this additional work commitment was actually overlooked.

From October 2nd to December 18th 2006 the Appellant was on certified sick leave by reason of “stress and hypertension” and thus deemed by the local GP unfit to work. Since according to his contract of employment the Appellant was entitled to sick pay for “qualifying days” and this had been defined as “the days in the week on which the lecturer was actually time-tabled to work” this continued to be paid during his absence.

The Respondent suspected that the Appellant might work at his business also when he should have worked at the college and instructed an inquiry agent to conduct an investigation. On completion of the investigation, the agent produced a DVD showing the Appellant at his business clearly involved in working activities. The Respondent decided thus to suspend the employer and to open a disciplinary procedure, during which this was unable to provide consistent and coherent explanations for his behaviour. The Appellant was hence dismissed for gross misconduct by reason of “working for financial gain while drawing sick pay from the College.”
The case before the Tribunal
As the DVD clearly showed the Appellant working at his garage and since that was considered in open contrast with the circumstance that this received sick pay during that period, the dismissal for gross misconduct was considered totally justified.

It is worth recalling that the case for the Respondent was limited to the fact that the Appellant was receiving sick pay, whilst doing remunerative work elsewhere, without having informed its employer or having asked its consent. The employer did not contest the circumstance that whether the employer was fit to work elsewhere he could have been fit to work at the college, too. The case was not hence presented as a “malingering” case.
The Appellant, from his side, admitted having been at the garage as showed by the DVD and justified his behaviour with the following arguments:
1)    Since the reason of his illness was basically linked to work-related stress, the fact he had been deemed unfit to work (at the college) did not imply that he was not fit to work at the garage, although this was not the object of the Court case;
2)    He could work at the garage during the days he was not contractually committed to the college;
3)    The DVD was not clearly showing that he was working at the garage;
4)    The dismissal should have been considered unfair in that vitiated by the surveillance activity which represented a breach of his rights under Art. 8 of the European Convention of Human Rights.
The Tribunal’s Reasons
The Tribunal rejected the Appellant submission that the real reasons for dismissal were unrelated to his remunerative work at the garage, whilst receiving sick pay from the college. Yet, the use of surveillance was considered by the Tribunal fair and neither intrusive nor disproportionate, the evidences contained in the DVD were judged thus admissible and the provisions of the Art. 8 respected.
As for the Appellant submission that he did not receive sick pay during the days he was working at the garage in that not coincident with his obligation to work at the college, the Tribunal concluded that these were findings of fact with which it, unless some particularly negative aspect emerged, could not interfere and that the Appellant may have not availed himself of this distinction in any case.

The Tribunal did not indeed deem the Appellant conduct dishonest, but whether this would have asked his employer about the possibility to perform work elsewhere during his illness, he would have known how to behave and would have put the Respondent in a position to decide whether to continue to pay him or otherwise. The Appellant did not so that the Tribunal considered him reckless in this respect. As for his presence at the garage during his stress-related illness, the Tribunal held that it was sorely acceptable that this could perform some activities such as gardening or shopping, but it did not accept that this might be involved in remunerative activities, as the presence at the garage was since he was receiving a profit.


The Appeal
The appeal was basically based on three grounds.

Ground 1
Ground 1 was based on new contractual evidence not presented to the Court during the previous hearings. The new document was, nonetheless, considered uninfluential to the Court decision and was not hence considered.

Ground 2
The Appellant’s Solicitor admitted that, albeit the contract of employment of his client specified the number of hours this was obliged to work, it did not provide for their schedule. In the Respondent view it was basically a flexible contract, but there was not such a mention in the contract so that in the Appellant’s Solicitor opinion it breached the Employment Rights Act 1996. Yet, the Applicant’s Solicitor stressed the circumstance that the contract did not state that the Appellant might have been called to work on Thursdays and Fridays; his dismissal was thus unfair under the circumstances. Reference was made to this respect to Murphy v Nissan Motor Manufacturing UK Ltd, a judgment of the employment tribunal sitting at Newcastle-upon-Tyne on 11 July 2006 Case No. 2511366/04.

Nonetheless, Ground 2 was not considered relevant by the Court either. The event that the Appellant worked from Monday to Wednesday, rather than from Thursday to Friday had been already recognised by the Tribunal as unexceptionable. Also this point was thus deemed irrelevant to the consideration of the Appellant dismissal as unfair.

During the hearings, it was actually cited several times the Court case Murphy v Nissan Motor Manufacturing UK Ltd. This was a case about an employee dismissed because carrying out a variety of different works when in sick leave, for which the Tribunal found it particularly difficult to pinpoint whether some of these were actually unpaid. Also in this instance, the employee received sick pay from his organization, but the Court found that the Claimant dismissal had been unfair on the following bases:

1)    Nobody at Nissan was able to justify the dismissal and clearly explain:

- To what extent the Claimant’s conduct was objectionable;

- Which “implied rule” the employee had breached working while receiving sick pay;

- What the real reason for the Claimant’s dismissal was;


2)    It is not objectionable for an employee who has reported sickness to do other types of jobs for which this may be fit without receiving compensation.


The Tribunal concluded that it might have been reasonable to dismiss the claimant whether Nissan would have introduced a policy clearly stating that the employees who wish to undertake remunerative work while receiving sick pay need to previously receive the employer consent; but such a policy had never been introduced at Nissan.

The Solicitor of Mr McCann relied on this latter point to contend that dismissals in absence of a specific policy should be invariably considered unfair. Notwithstanding, it can be hardly argued that in the Nissan case the Judge actually held  that in the event an organization has not introduced a specific absence policy, the dismissal of an employee carrying out paid job elsewhere has to be automatically considered unfair. In general, when an employee is contractually bound to work for an employer at a precise time, the contract obliges this on an exclusive basis and the employee cannot hence work elsewhere for other employers at the same time. The fact of being ill does not change anything to this respect. Despite the organization has nothing to lose whether under such circumstances his employee do a job for which this remains fit, the employer is still paying for that time getting nothing in change; yet, the fact the employee works elsewhere might jeopardize his recovery capability.
In essence, employers provide sick pay to their employees based on the assumption that these are unable to make any earning during their illness; but whether this should not be the case the employees’ duty to inform their employer and have its consent to work elsewhere should be considered as a minimum requirement. Moreover, this notification can enable the employer to eventually make the necessary arrangements as regards sick pay. The fact an employee makes a double earning should invariably constitute and be treated as serious misconduct.
The Appellant’ Solicitor reference to the breach of the Employment Rights Act 1996 was hence considered by the Court “parenthetical” and accepted as such by the Appellant’s Solicitor himself.


Ground 3
This ground was still aiming at emphasizing the circumstance that the Appellant did not have any formal obligation to work on Thursdays and Fridays and that he had been object of surveillance activities during those days, breaching as such the Art. 8 of the Human Right Act, circumstance that the Tribunal did never consider as relevant.


The appeal lodged by Mr McCann against the Clydebank College was finally rejected by the Tribunal and his dismissal confirmed. Considering this case and Murphy v Nissan Motor Manufacturing UK Ltd, it clearly emerges that Courts decide these cases according to the circumstances, to wit:

- Does the employee receive sick pay?

- Has the employee informed his/her employer that s/he will do a different job during sick leave?

- Has any pay arrangement been agreed between the employer and the employee?

- Has the employer introduced an absence policy explaining employees what to do under these circumstances?


Employers as well as employees should take heed of these specific aspects and act accordingly.

Longo, R., (2011), Employees might be allowed to work elsewhere while on sick leave provided they are not drawing sick pay; HR Professionals, [online].