An employee goes to the doctor telling him he has work-related stress because he has to work 16 to 24 hours each day! The doctor signs him off work. When that sick note runs out, the employee goes back to the doctor, saying that he feels no better and he is again signed off work. What the employee fails to mention to the doctor is that, earlier in the year, without booking holiday from the employer, he made arrangements to go to Australia for the two weeks covered by the second sick note!
When the employee returns to work, suntanned from his holiday and having posted on Facebook a picture of himself driving a sports car in Singapore at the weekend, he is called in to the director’s office and his employment is ended. Not surprising, you may think.
What might surprise you is that in this case, Lyons v Total Sign Solutions Ltd, (a) the employee was found to be unfairly dismissed (b) the employment tribunal’s decision to drastically reduce the compensation payable to him because of his conduct was overturned on appeal and (c) he was awarded costs against the employer.
Lots of things went wrong in this case for the employer (who didn’t have the benefit of our advice!) but some of the main lessons of the case are these.
First, there is no rule that the period covered by a sick note has to be spent at home. Obviously, if the employee’s behaviour is completely inconsistent with the alleged reason for his absence, there is a case to be answered but we have come across numerous cases where it is argued that a break from routine is ‘just what the doctor ordered’ for dealing with stress and depression. The critical point is not to jump to conclusions but to investigate the employee’s story thoroughly, getting evidence from the doctor or from an occupational health specialist.
Second, the employer in this case argued that they didn’t dismiss the employee; rather he resigned in the meeting with the director. Unfortunately for the employer, the tribunal took the view that the employee resigned because he was faced with an ultimatum: resign or be sacked. It is established law that in those circumstances the employee is deemed to be dismissed – ultimately, the employer has forced the termination. For that reason, the employer should avoid putting the resignation option to the employee.
Third, because the employer argued that the employee resigned and that the employee was not dismissed, they put forward no reason for dismissing him. Logical, you may think. However, because the tribunal found they did dismiss, the employer failed to get over the first hurdle in an unfair dismissal case, that of showing a potentially fair reason for dismissal. Oddly, in law it is perfectly acceptable to argue two inconsistent points. In this case, the right course would have been to argue “we did not dismiss him but, if you find we did, this is why we did it”!
This would have got the employer and their advisers focussing on why the employee was hauled in to see the director. Remember that being away from home when signed off sick is not of itself misconduct. So, the employer needed a reason that would hold water. Here, the problem for the employer was that they focussed (when it came to trying to reduce the employee’s compensation) on his application for the second sick note, which they said was fraudulent, designed to provide cover for his intended holiday. They didn’t challenge the genuineness of his first period of sickness absence. There were two problems with that: if he was genuinely sick first time around, what had changed to make his second application fraudulent and, in any event, the GP had apparently been satisfied he was suffering from stress. We would suggest that what they should have focussed on was the fact that the trip to Australia was booked much earlier in the year, without any annual leave being booked, and whether the doctor was aware of the upcoming trip when he signed the employee off (he wasn’t).
A proper and thorough investigation, including getting a report from the GP, prior to the employee being hauled into the director’s office was, in reality, vital to giving the employer grounds for dismissal.
The tribunal’s decision to significantly reduce the employee’s compensation (a) on the ground that the employee, although technically unfairly dismissed, was actually guilty of misconduct and (b) therefore would in any event have been fairly dismissed in due course had a proper investigation taken place was itself flawed because the tribunal had decided that the original sick note was obtained fraudulently when no one had argued that that was the case.
Effectively, the employee won his case hands down on appeal, albeit that the case was sent back for a different judge to consider whether there were any grounds legitimately to reduce his compensation. It is not surprising therefore, given that under the fees regime the employee had had to pay £1,600 to have his case heard, that he was awarded costs. What is surprising is that he was only awarded half of that fee, £800, by way of costs – it could have been worse. In the rare case where Ellis Whittam fights your case but loses, it is comforting to know that costs awards are covered by your insurance.