Our website is set to allow the use of cookies. For more information and to change settings click here. If you are happy with cookies please click "Continue" or simply continue browsing. Continue.

Employment Law

Legal guidance - compliance - software

06 FEB 2013

Lloyd v BCQ Ltd UKEAT/0148/12/KN and UKEAT/0239/12/KN; (2013) EMPLR 008

Termination of employment - permanent health insurance - entitlement


12 November 2012

Employment Appeal Tribunal (EAT)

Silber J, Mr D J Jenkins OBE and Mr G Lewis

The court in Aspden v Webbs Poultry suggested that, where employers have a permanent health insurance (PHI) scheme providing replacement income for employees absent because of long-term illness, there is an implied term that the employer will not dismiss the employee for ill health if, to do so, would prevent the employee from benefiting from the scheme. Subsequent cases (eg Reda v Flag Ltd) have suggested that such a term should not always be implied.

L was off sick for over three years. Medical evidence suggested there was no prospect of returning to work in the foreseeable future. He was therefore dismissed. At the time of dismissal, he was receiving replacement income under a PHI scheme, which provided benefits up to the age of 60, when occupational pension would become available. The payments stopped on termination of employment but the employers negotiated a cancellation payment from the insurers, which it passed on to L.

L's claims for disability discrimination, age discrimination and unfair dismissal failed. L also complained that the dismissal breached an implied term that he would not be dismissed so as to remove his entitlement to PHI benefit.

L's contract contained an ‘entire agreement' clause (ie a clause stating that the written terms constituted the entire agreement and there were no other terms, express or implied). There was no other evidence suggesting the employers intended to imply such a term. For those reasons, it was held there was no implied term preventing the employers from dismissing L.

In any case, since L had received the cancellation payment, he had received all his benefits under the PHI scheme. For that reason also his claim failed.

To view the case transcript, you must subscribe to Jordans Employment Law Online (if you already subscribe click here to log in).

To request a free trial click here and select Jordans Employment Law online from the drop down menu


Law and Practice

The status of employment rights on the transfer of an undertaking is an extremely complex area of...

More Info from £76.50
Available in Employment Law Online

Social Media in the Workplace

A Handbook

This book is intended as a handbook for advisers to employers, providing an overview of the...

More Info from £58.50
Available in Company Law Online
Subscribe to our newsletters