Mr J McAllister v Commissioners of Her Majesty’s Revenue and Customers

27th April 2023

Mr J McAllister v Commissioners of Her Majesty’s Revenue and Customers

Facts

The claimant in this case, Mr McAllister, was employed as an administrative officer at HMRC from May 2011 until his dismissal in December 2018. During his employment he was off sick for long periods of time due to stress, anxiety and depression, although not all absences were related to his mental health issues. HMRC made reasonable adjustments such as letting him return to work on a phased basis.

Mr McAllister was signed off sick for a month in July 2018 following a breakdown, after being diagnosed with a mixed anxiety and depressive disorder. Various meetings took place between HMRC, their occupational health adviser and Mr McAllister to determine whether HMRC could continue to support his absence. Mr McAllister was not always responsive to calls from work during leave and further sick notes were produced determining him as unfit to work. Eventually, HMRC decided that all avenues of reasonable adjustments to support Mr McAllister had been exhausted. They considered the information provided from the occupational health report and all prior events and concluded that Mr McAllister’s absences impacted on productivity and morale within the team. HMRC concluded that they could no longer support his needs, which resulted in Mr McAllister’s dismissal on the grounds of capability.

Following the dismissal, HMRC submitted an application for the Civil Service Compensation Scheme (“CSCS”) which is submitted when a civil servant is dismissed for what they define as “inefficiency” and the “employing department decided that payment of compensation would be appropriate”. The compensation provided under the CSCS is discretionary and in this case, the primary consideration when determining the compensation for Mr McAllister was in relation to his “unsatisfactory attendance”. Subsequently, the payment awarded to Mr McAllister was reduced by 50% on the basis that he had cooperated to some extent with efforts to support his return to work, but he had not always been available to be contacted and HMRC were forced to chase him to complete multiple forms.

Despite the Civil Service Appeal Board (“CSPB”) increasing his award from 50% to 80% following further consideration of his mental health condition, Mr McAllister brought claims of unfair dismissal and disability discrimination to the Employment Tribunal (“ET”).

Decision

The ET found that Mr McAllister’s mental health condition amounted to a disability under the Equality Act 2010 and although the dismissal was therefore due to disability-related absences, HMRC could objectively justify the unfavourable treatment as it was a proportionate means of achieving the legitimate aim of maintaining a good standard of attendance and customer service and to apply workplace policies fairly and consistently to employees. The ET considered alternative, less discriminatory measures (such as waiting longer or issuing Mr McAllister with a further written warning), however it did not find these to be appropriate. Thus, the ET dismissed the disability discrimination claim in relation to the dismissal.

In respect of the CSCS payment, the ET accepted Mr McAllister’s argument that the reduced payment was because of something arising in consequence of his disability.

Mr McAllister appealed the ET’s decision to dismiss his claim for disability discrimination in relation to his absences, however the Employment Appeal Tribunal (“EAT”) upheld the ET’s finding. The EAT agreed that it was legitimate for HMRC as a public body to seek to maintain satisfactory attendance on the part of its employees, ensuring efficient use of resources. It also found that Mr McAllister’s absences had adverse impacts on HMRC, including negatively effecting the morale of the team and a large amount of management time and energy being devoted to managing the absences. The EAT found Mr McAllister’s dismissal to be a proportionate means of achieving these aims, noting that the ET had carried out a balancing exercise between the discriminatory dismissal and the weight of Mr McAllister’s absence on HMRC.

In response to the ET’s decision regarding the CSCS payment, which HMRC cross-appealed, the EAT held that the ET had erred in their judgment as the payment was not unfavourable treatment, rather it was in fact more favourable treatment. The EAT made this decision on the basis that if Mr McAllister was dismissed for a reason other than his disability, then he would not have received the award. The judge went further, agreeing with HMRC that it would be highly unlikely that a non-disabled person would have received this award given that such payments are designed to compensate employees unable to achieve the required level of attendance due to their underlying health condition. The EAT therefore allowed HMRC’s cross-appeal.

Comment

Whilst it can be difficult for employers to manage long-term sickness absences relating to an employee’s disability, this case demonstrates that an employer is able to terminate the employment when it is adversely impacting their business, but only where the business can clearly show that there is a legitimate aim in doing so and that the measures they take are proportionate to this legitimate aim. As always, an employer must first explore what alternative measures can be taken that do not involve dismissal and ensure that all reasonable adjustments have been made.

Finally, this case is helpful to employers as it provides examples of what might be regarded as legitimate aims when dealing with long-term absences and disabilities, for example requiring a sufficient standard of attendance at work or to maintain a consistent application of workplace policies. As ever, when setting out a legitimate aim an employer must evidence the impact on the business, for example in this case HMRC could show that Mr McAllister’s absence adversely affected productivity and team morale.

Get in touch with an Employment law advisor today 

If you require assistance with managing a long-term sickness absence, or if you have any concerns about how to best support disabled employees at work, please contact our Employment team on 0161 832 3434.

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