In this case, the employee, Mr Singh, was invited to a disciplinary hearing and, the next day, was signed off sick by his doctor. While absent, he was examined by occupational health who did not advise that his sickness wasn’t genuine. His employer, Metroline, believed he was trying to avoid the disciplinary hearing and paid him SSP only, instead of company sick pay. Mr Singh resigned and brought a claim of constructive dismissal.
At Tribunal, they found that Metroline had the contractual right to suspend without pay if they thought the absence was not genuine, but this power had not been exercised. Separately, the contract allowed company sick pay to be withheld where, after investigation, the absence was found not to be genuine. In this case, there was no investigation and no other contractual grounds on which company sick pay could be withheld, so there was a breach of contract. However, the Tribunal found that the breach was not fundamental as its intention was to encourage Mr Singh to participate in a disciplinary process rather than an intention not to be bound by the employment relationship. Mr Singh appealed and the EAT upheld his appeal. The EAT found that the Tribunal had made an error of law; for the breach of contract to be fundamental, there does not need to be an intention by the employer not to be bound by the contract. In fact, all that is required is an intention to no longer comply with the terms of the contract that is so serious it goes to the root of the contract. In this case, there was a deliberate decision to withhold pay to which Mr Singh was entitled, resulting in a significant reduction in earnings, in circumstances where there were other contractual provisions which would have allowed Metroline to deal with suspicions about his absence. This was a fundamental breach.
Why does this decision matter?
Contracts of employment can contain provisions regarding withdrawal of company sick pay where employees are off sick before disciplinary procedures. This case demonstrates the importance of checking contracts carefully before withholding company sick pay, and following internal procedures carefully first. Here, Metroline breached Mr Singh’s contract of employment in the circumstances in which it withheld company sick pay, thus leaving him able to successfully claim constructive dismissal.
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Singh v Metroline West Ltd [2022] EAT 80
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