PHI Benefits & Return to Work: Legal Considerations for Employers

‘We have an employee that was certified permanently unfit to return to work and has been in receipt of PHI benefits as a result. However, at the most recent annual review, they have now been deemed fit to return. Their role is no longer available as we could not keep this open indefinitely. What should we do next?’

This can be complex situation and it depends on the exact situation of the employee. Many will remain employed in order to be in receipt of the PHI benefit – effectively remaining on the same terms of employment bar any amendments to agree they do not need to attend work, perform their duties and, of course, their remuneration as a result of their ongoing sickness absence.

Previous case law, has made it clear that if their role is still available, then they would be entitled to return to that role on their previous terms of employment. In most situations, like yours, this is unlikely, particularly given that by the time an employee is receiving PHI benefits they will likely have been absent for a lengthy period of time in any event.

You would need to balance the employee’s employment rights with those of the employee now undertaking their role. If an employee has been promised their role upon return, then it is likely that if you failed to appoint them into this position it would result in a change to their terms and conditions of employment (which may allow them to resign with immediate effect and claim constructive dismissal) and potentially disability discrimination. You would then need to consider alternative employment for their replacement – but the return of the original employee would potentially allow a fair dismissal for some other substantial reason (SOSR). You would need to consider whether there are any other roles they could carry out before making the decision to dismiss.

If a return to their previous role was not promised, and the original employee was aware a replacement had been recruited (or should be given the length of time out of the business), then it is likely you would be able to justify a SOSR dismissal for them, again as long as alternative roles had previously been considered.

This is a highly unusual situation and we would be more than happy to discuss it further to ensure that the best outcome is reached for both the business and the individuals affected, in what is clearly a sensitive situation.